KfW Provides Grant for Indonesian Geothermal Project

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"Nation's geothermal reserves dwarf its installed capacity."

KfW, the German development bank, said it will provide a 7.7 million-euro ($10.3 million) grant to partly finance a geothermal project in Aceh province in Sumatra.

Most of the money will be used to fund exploratory drilling and a feasibility study, according to a statement from the Frankfurt-based bank. There is likely to be more than 200 megawatts of untapped geothermal energy potential in the area, Thorsten Schneider, project manager at KfW Entwicklungsbank, part of KfW Bankengruppe, said today by e-mail.

Following the exploration phase, which should take about two years, the intention is to build an initial 55-megawatt geothermal power plant in the Indonesian province, said Schneider. The whole project, including construction of the power plant, will take about five years.

The project is part of the Indonesian-German Partnership on Climate Change, the statement said. The partnership gives support to Indonesia's government in geothermal energy, forestry and urban climate protection.

KfW would also consider providing a loan to build the geothermal power plant, Schneider said. Indonesia has geothermal reserves of about 28,000 megawatts. The installed capacity is less than 1,200 megawatts at present and the government is aiming for 4,000 megawatts of geothermal power plants by 2014.

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