World Bank approves U$4 million grant to Indonesia for geothermal project in Indonesia

Antara 3 Jun 08;

Washington (ANTARA News) - The World Bank`s board of executive directors has approved a US$4-million GEF (Global Environment Facility) Trust Fund Grant for a geothermal power generation development project in Indonesia.

The geothermal power generation development project aims to promote the expansion of economic and environmentally friendly geothermal power generation in Indonesia, and reduce carbon dioxide (CO2) emissions from the power system, according to information on the bank`s official website.

There are four components to the project which was approved on May 29, 2008.

The first component is the policy framework for scaling-up the development of geothermal power.

This component will assist the Indonesian government in developing and implementing an integrated set of policies that will provide sufficient regulatory certainty, risk mitigation, and economic incentives for increased public and private investments toward developing geothermal power in Indonesia.

The second component is transactions management for mobilizing investments in geothermal power generation. This component will assist the Indonesian government , especially the energy and mineral resources ministry, to develop its capacity in planning and transacting geothermal power development in an efficient and transparent manner.

The third component is geothermal sector technical capacity building. This component will help address the limited domestic technical capacity for handling most geothermal related activities, and support the long-term development prospects of the sector.

Finally, the fourth component is project management assistance.
This component will provide the necessary technical consultant support to the directorate of geothermal enterprise supervision and ground water management, the executive implementation unit, for the management and supervision of the project.

Apart from the grant, the Indonesian government also expected to get a program loan from the World Bank amounting to US$1.2 billion to cover the country`s budget deficit of around RP82.3 trillion.