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Economic development

ADB Approves $180 Million Loan to Boost Indonesia's Geothermal Energy Capacity

Strategic Insights

— 1 min read

The Asian Development Bank (ADB) has approved a $180 million loan to strengthen Indonesia's geothermal energy capacity by supporting PT Geo Dipa Energy (GDE), a state-owned enterprise leading the country's geothermal power development. The new funding will support the construction and commissioning of two 55-megawatt geothermal power plants on Java Island, which will generate clean, reliable base-load electricity for the Java-Bali grid, reducing the country's reliance on fossil fuels and cutting carbon dioxide emissions by over 550,000 tons annually.

Key Takeaways:

  • The ADB loan of $180 million will support the construction and commissioning of two 55-megawatt geothermal power plants on Java Island, increasing Indonesia's renewable energy production and reducing carbon emissions.
  • The geothermal plants will generate clean, reliable base-load electricity for the Java-Bali grid, significantly reducing the country's reliance on fossil fuels.
  • The project will support Indonesia's transition to a sustainable, low-carbon energy future and help stabilize the grid by providing a steady, renewable energy supply.
  • PT Geo Dipa Energy plays a crucial role in driving the next phase of geothermal development in Indonesia.
  • The project aims to overcome barriers to geothermal growth in Indonesia, including high exploration costs and investment risks associated with early-stage drilling and resource uncertainty.
  • The ADB loan aligns with Indonesia's National Energy Policy and the government's target to achieve net-zero emissions by 2060.
  • The project supports ADB's broader commitment to climate finance, pledging to fully align its operations with the Paris Agreement and mobilize $100 billion in climate financing for developing member countries by 2030.

Statistics:

  • $180 million loan approved by ADB to support Indonesia's geothermal energy capacity.
  • 55-megawatt geothermal power plants to be constructed and commissioned on Java Island.
  • 29 gigawatts of geothermal potential in Indonesia, with only 2.1 gigawatts developed so far.
  • 550,000 tons of carbon dioxide emissions expected to be reduced annually through the project.
  • 400,000 households expected to be supplied with electricity once the new facilities are completed.

Sources:

  • The Asian Development Bank (ADB)
  • PT Geo Dipa Energy (GDE)
  • Indonesia's National Energy Policy
  • The Paris Agreement
  • Global Data Point (2025)

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