Indonesia Geothermal Resource Risk Mitigation Project (GREM)

Start & End Date: 2019-2029

Country/Countries: Indonesia

Multilateral Institution(s) Involved: World Bank

Geothermal energy is expected to play a significant role in reducing Indonesia’s greenhouse gas emissions. As a clean and renewable energy source that provides power continuously, geothermal can reduce the country’s dependence on coal-fired power and other fossil fuels. If geothermal resources can be accessed easily, costs are competitive with coal and natural gas. Under the Indonesia Geothermal Resource Risk Mitigation (GREM) project, the financing will help public and private sector developers to mitigate risks in exploration of geothermal resources, including covering a part of the cost in case of unsuccessful exploration.

The objectives of the Geothermal Resource Risk Mitigation Project of Indonesia are to scale up investment in geothermal energy development and support the Borrower in its efforts to reduce greenhouse gas emissions in the country. The project has two components. Component 1 is to mitigate risks in geothermal resource drilling supported through the establishment of a new financing facility which is financed with 455 million US Dollars. Component 2 for technical assistance and capacity strengthening is financed with 10 million US Dollars grant. The project is funded by the World Bank (IBRD loan and GCF/CTF grants) and implemented by the PT Sarana Multi Infrastruktur (Persero).

As of June 2021, the Geothermal Resource Risk Mitigation (GREM) facility has been made operationalized by PT Sarana Multi Infrastruktur (SMI) after finalization of the Operation Manual and public disclosure of the Developer’s Manual. SMI has been intensively discussing with various developers to conduct preliminary technical and safeguards screenings, prepare clear timeline and the facility requirements. The first GREM Pre-Proposal applications are expected from the public window and private window during August - October 2022.