JAKARTA, March 23 (UPI) — Indonesia’s massive geothermal energy potential has been boosted by a $400 million investment fund plan to help double the sector’s energy capacity, the World Bank announced.
The $400 million plan, endorsed by the Trust Fund Committee of the Clean Technology Fund is designed to support the Indonesian government’s long-term goal of reducing greenhouse gas emissions by 26 percent by 2020.
The plan will involve co-financing from the multilateral CTF to increase large-scale geothermal power plants and to boost programs to promote energy efficiency and renewable energy by creating risk-sharing facilities and addressing financing barriers to small- and medium-scale investments.
By 2020, the Indonesian government hopes to provide electricity access to 90 percent of Indonesia’s population; about 65 percent currently have access.
The $400 million funding follows an Indonesian energy and mineral resources ministry announcement earlier this month saying it had revised the country’s geothermal potential to 28,100 megawatts, up from 27,000 megawatts a decade ago.
The ministry’s geological agency said that with 30 years of operation, Indonesia’s revised geothermal potential was equal to 12 billion barrels of oil. That compares with the country’s current oil reserves of 6.4 billion barrels, the agency said.
Indonesia’s national energy policy aims to obtain 9,500 megawatts of power from geothermal sources by 2025. Less than 1,200 megawatts of geothermal energy has been explored, according to the agency.
“Indonesia has the largest geothermal energy potential in the world,” said World Bank Vice President for Sustainable Development Katherine Sierra in a statement announcing the $400 million plan.
“The co-financing will help Indonesia reduce the use of fossil fuels to meet its rapidly growing energy needs. It also gives a clear signal on the practical actions developing countries can take to combat global climate change,” she said.
Sierra, along with Ursula Schaefer-Preuss, vice president for knowledge management and sustainable development at the Asian Development Bank, point out in an editorial in The Jakarta Post Tuesday that Asia’s energy demand is projected to almost double by 2030. Unless development and consumption patterns shift, they said, the region would soon become the largest source of new greenhouse gas emissions.
Dennis Tirpak, a climate change expert at the World Resources Institute, said the $400 million funding was a positive step that can help jump-start Indonesia’s geothermal industry, ClimateWire reports. He pointed out, however, that Indonesia also needs long-term policy changes, particularly relating to fossil fuel subsidies, if it aims to achieve lasting changes to its energy structure.
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