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PT Pertamina Geothermal Energy (PGE) and PT PLN (Persero) ascertained each get a loan of U.S. $ 125 million from the trust fund climate change developed countries, for development of geothermal power plants this year.

Certainty was obtained following the ratification of geothermal energy development loan proposal the Government of Indonesia with a total value of U.S. $ 400 million by the Trust Fund Committee, the Clean Technology Fund (CTF) – one of climate change trust fund financed by a group-developed countries in Manila, yesterday.

Ursula Schaefer-Preuss, ADB Vice President of Knowledge Management and Sustainable Development, said of the CTF funds are expected to help transform the utilization of renewable energy and in turn, supports the government’s target of RI in reducing CO2 emissions by 26% before 2020.

“The availability of supply of renewable energy generating greater would help the government achieve the purpose of providing electrical access from the current 65% of the total population to 90% before 2020,” he said in a press release received today.

Financing plan will utilize a number of co-financing from multilateral development banks to develop a geothermal power plant and accelerate large-scale promotion of energy efficiency initiatives and renewable energy.

Documents CTF Investment Plan for Indonesia Business received mention from a total of U.S. $ 400 million, PT PGE will get a loan of U.S. $ 125 million to develop geothermal power plants with capacity up to 260MW. These funds will be channeled through World Bank.

Meanwhile, PLN will receive a loan of U.S. $ 125 million for development of geothermal power plant with a capacity of 250MW, in which the fund manager is the Asian Development Bank (ADB).

Then, a total of U.S. $ 50 million will be used to finance technical assistance from IFC and ADB, which is to develop geothermal energy resources with a capacity of 300MW with private sector participation through a system of risk mitigation.

The remaining funds of U.S. $ 100 million for the technical assistance of ADB and IFC to improve the energy efficiency and promoting utilization of renewable energy, particularly biomass. The method used is the formation of risk sharing facility with commercial banks and the state.

The way it is intended to expand access financing to small-medium scale investment and also bear the investment risk premium swelling of renewable energy and energy efficiency, and also extended the tenor of bank loans.

With these strategies, CTF funds channeled to the Motherland is believed to be able to mobilize an additional U.S. funds $ 2.7 billion from various other sources.

When confirmed, the World Bank’s Country Director in Indonesia Joachim von Amsberg said it would ensure there is coordination between the World Bank and the governance of the CTF in loans for PGE.

Because at the same time, the World Bank is also still preparing soft loan of U.S. $ 500 million to PGE and PLN for geothermal energy projects. Loan proposal will be brought to the Board of Directors in Washington DC for authentication before November.

CTF is one of two trust funds under the auspices of the Climate Investment Fund. The function of these trust funds is to finance projects and programs for technologies with low CO2 levels in order to reduce long-term greenhouse gas.

Climate Investment Fund was established in 2008 by 10 countries namely Australia, France. Germany, Japan, Netherlands, Norway, Sweden, Switzerland, UK and U.S. with a total commitments of U.S. $ 6.1 billion fund.

Indonesia is the fourth Asian country to have a CTF-funded investment plans for the development of low carbon technologies are promoted government. Besides Indonesia, the Philippines, Thailand and Vietnam also received CTF funding.

With the legalization of funds of U.S. $ 400 million for the RI, the total support of the CTF for the Asian touch U.S. $ 1.2 billion and has mobilized nearly U.S. $ 13 billion in other funds from government, private sector and other sources.