Sarulla Project in Indonesia to start construction next month
JW Marriott, Jakarta, Indonesia (source: flickr/ Aktiv Phil, creative commons)
Alexander Richter
28 May 2014
After significant financing issues, the project will be the largest geothermal plant world, with 330MW and will be constructed in 3 phases, the first one to start this June and be ready in 2016.
According to a recent news piece from Reuters, Indonesia will shortly commence the construction of the Sarulla project, the ambitious “$1.6-billion Sarulla project, the world’s biggest geothermal power plant”, as stated by the country’s chief economic minister on Wednesday.
The same source informs that even though the country is an economic and geothermal powerhouse, is trying its best to meet the needs of ever-growing demand. Considering all of this, the sector is struggling to find investment, mostly due to the intricate regulatory system present in the country and the impediments to securing project finance.
Reuters also reveals that the Coordinating Economic Minister Chairul Tanjung declared that the project “had reached financial closing and the government expected construction to begin next month” but did not provide any other details.
This project is not a new concept, since it was started in 1990 but was never finished due to financial issues.The first phase is expected to be operational within 2 years and two further phases would follow just a year and a half from the first one, according to the same source.
According to the aforementioned news source, “The banks involved in the financing are the Japan Bank for International Cooperation (JBIC) and the Asian Development Bank (ADB) along with Bank of Tokyo-Mitsubishi UFJ Ltd, ING Bank NV (a unit of ING Groep NV ), Societe Generale, Sumitomo Mitsui Banking Corportation, Mizuho Bank Ltd and National Australia Bank Ltd. The project is sponsored by Itochu Corporation (25 percent), Kyushu Electric Power Company (25 percent), PT Medco Power Indonesia (37.5 percent), a unit of Medco Energi Internasional and Ormat International, a unit of Ormat Technologies Inc (12.5 percent).”
Source: Reuters Website
