The Asian Development Bank (ADB) has approved a $180 million loan as the second additional financing to support PT Geo Dipa Energy (GDE), an Indonesian state-owned enterprise, in expanding the country’s geothermal power generation capacity. This funding aims to strengthen Indonesia’s clean energy transition and sustain progress toward its climate goals by addressing rising project costs and ensuring timely project completion.
The financing is part of the ongoing Geothermal Power Generation Project, which supports the construction and commissioning of two geothermal power plants on Java Island, each with a capacity of 55 megawatts. Once operational, these facilities will provide reliable, environmentally friendly base-load electricity to the Java–Bali grid and are expected to reduce carbon dioxide emissions by more than 550,000 tons annually.
ADB’s Country Director for Indonesia, Jiro Tominaga, highlighted the importance of this collaboration, stating, “ADB is pleased to partner with the Government of Indonesia in advancing the country’s sustainable energy transition. PT Geo Dipa Energy plays a catalytic role in driving the next phase of geothermal development. We look forward to continuing our close collaboration to expand Indonesia’s geothermal capacity and accelerate the shift toward a cleaner, more resilient energy future.”
Despite Indonesia’s vast geothermal potential—estimated at 29 gigawatts, the largest in the world—and its position as the second-largest holder of installed geothermal capacity at 2.1 gigawatts, development has been slower than expected. The challenges stem from high upfront exploration costs, long development timelines, and elevated financial risks.
To address these barriers, the ADB-approved project, initially launched in 2020, aims to enhance GDE’s capabilities in geothermal exploration, development, and power generation. It also focuses on strengthening GDE’s institutional capacity to plan and execute large-scale projects while supporting government-led drilling programs to attract greater private sector participation.
In addition to its focus on energy development, GDE has incorporated a strong community engagement component with a particular emphasis on gender inclusion. The company allocates funds to support women’s economic empowerment through small business initiatives and scholarships and actively promotes gender balance among its employees and contractors by adopting gender-sensitive operational practices.
This latest loan builds on earlier ADB support for the project. In 2023, ADB processed the first additional financing—a $10 million grant from the Japan Fund for the Joint Crediting Mechanism (JFJCM)—to integrate advanced technology into the Patuha Unit 2 geothermal power plant, further enhancing its efficiency and sustainability.
ADB continues to play a leading role in promoting inclusive, sustainable, and resilient growth across Asia and the Pacific. Working closely with its member countries and partners, the bank leverages innovative financial mechanisms and strategic collaborations to tackle pressing development challenges, build high-quality infrastructure, and support the global transition to clean energy. Established in 1966, ADB is owned by 69 members, including 50 from within the region.
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