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Powering Indonesia’s Future with Geothermal Energy

Powering Indonesia’s Future with Geothermal Energy

Powering Indonesia’s Future with Geothermal Energy
jschoshinski
Tue, 01/14/2025 – 16:19

Indonesia ranks second behind the U.S. in installed geothermal capacity and is home to some of the world’s largest geothermal reserves. However, despite its vast geothermal potential, Indonesia faces challenges in securing financing and navigating regulatory hurdles for large-scale geothermal projects. One such project, the Ijen geothermal power plant in East Java, experienced delays after initial agreements in 2013, with investors pulling out and development stalling. Given Ijen’s importance in the nation’s energy transition and its inclusion in Indonesia’s 10-year Electricity Supply Business Plan, it was critical that the project secure funding to help Indonesia meet its clean energy goals.  
USAID played a pivotal role in overcoming these barriers by providing essential transaction advisory services to the project financing lender Indonesian infrastructure bank PT Sarana Multi Infrastruktur (PT SMI). Through the USAID Sustainable Energy for Indonesia’s Advancing Resilience (USAID SINAR) activity, USAID provided legal due diligence, identified development risks, and prepared term sheets, facility agreements, and corporate approvals. With the Agency’s support, the Ijen project is expected to leverage $227 million in financing and achieve generation capacity of 110 MW, helping to strengthen Indonesia’s energy security. 
In 2024, the U.S. International Development Finance Corporation (DFC) announced a commitment of up to $126 million for Indonesian geothermal developer PT Medco Cahaya Geothermal (MCG) to support the first phase of development at Ijen. DFC’s commitment  is in cooperation with PT SMI, which signed its own financing agreement with MCG in 2023.  
The first phase of the Ijen geothermal project, which will generate 31 MW of renewable energy capacity to the interconnected Java-Bali grid, is now on track for commercial operation by the end of this month. Once operational, the plant will provide a low-carbon energy source to two of the country’s most populous regions, helping Indonesia reduce its reliance on coal and decrease its carbon emissions. This achievement aligns with USAID’s regional priorities of advancing clean energy, reducing greenhouse gas emissions, and enhancing energy resilience in Southeast Asia.
The success of the Ijen geothermal project highlights the importance of transaction advisory services, innovative financing, and strategic partnerships in overcoming financial and regulatory hurdles for renewable energy projects. Innovative financing leverages U.S. Government, Government of Indonesia, and private sector investments to support the development of renewable energy infrastructure, ultimately advancing the energy transition towards a more sustainable future. Future energy transition efforts in Indonesia will benefit from similar approaches, emphasizing the need for strong public-private partnerships and clear legal frameworks to accelerate the deployment of advanced energy technologies.

Teaser Text
The USAID Sustainable Energy for Indonesia’s Advancing Resilience (USAID SINAR) activity provided support to the Ijen project, which is expected to leverage $227 million in financing and achieve generation capacity of 110 MW.

Publish Date
Tue, 01/14/2025 – 12:00

Author(s)

Janice M. Laurente

Hero Image
AdobeStock_607617676.jpeg

Blog Type
Blog Post

Strategic Objective

Mitigation

Region

Asia

Topic

Carbon
Emissions
Climate Finance
Clean or Renewable Energy
Grid Integration
Mitigation
Partnership
Private Sector Engagement

Country

Indonesia

Sectors

Energy

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Australian Open set to reduce plastic waste by 400 kg

Australian Open set to reduce plastic waste by 400 kg

Sustainability Victoria is serving up reusable cups at Australian Open 2025 to reduce single-use plastic waste and encourage people to reuse.

Tennis fans will be able to sip sustainably during AO 2025 with 38,000 reusable cups from Sustainability Victoria replacing single-use cups in selected bars around the precinct.

It’s projected 50,000 single-use cups will be avoided at the tournament, equivalent to 400 kg of plastic. Future reuse is set to multiply the savings.

“This is an exciting opportunity to reduce single-use plastic waste at one of Australia’s most iconic and popular events,” Sustainability Victoria’s CEO Matt Genever said. “We know people want to do the right thing by the environment and through this partnership we’re enabling and encouraging reuse behaviour so tennis fans can reduce their carbon footprint.

“Adoption of reusables, particularly in an event setting, is the only way forward if we’re to win the war on waste. Tennis Australia’s support is invaluable in helping us make no waste the new normal.”

The AO 2025 reusable cups have been produced by Melbourne-based bettercup, a Sustainability Victoria grant recipient that works with events and venues to eliminate single-use cup waste. The cups will be washed onsite by a team from Green My Plate, a social enterprise that provides plastic-free food and beverage alternatives for functions and events.

“Sustainability Victoria is bringing together key players in Victoria’s circular economy to design out waste and advance sustainability in sport,” Genever said.

With a record attendance of more than one million fans at AO 2024, Tennis Australia is looking for further ways to increase its sustainability.

“Reducing our environmental impact is an important part of future-proofing tennis,” said Matthew Nicholas, Tennis Australia’s director of sustainability.

“We’re building on the single-use reductions we’ve achieved over the past few years at the AO. In 2025, we’re projecting that the AO reusables program will prevent waste of more than 100,000 single-use cups, plates and bowls, which is more than triple what we achieved just two years ago.

“We’re also collecting and separating other hard-to-recycle materials at the tournament that we can’t substitute for reusables, from ball canisters to the players’ racquet string offcuts,” he said.

In addition to providing reusable cups, Sustainability Victoria will support Tennis Australia on its future sustainability strategy as Victoria transitions to a circular economy with less waste and emissions.

Image: Supplied