Sumitomo Corp. is participating in the Muara Laboh geothermal power project in West Sumatra, Indonesia through PT Supreme Energy Muara Laboh (SEML), a joint venture with INPEX Corp. and PT Supreme Energy (SE), an Indonesian private power project developer. The company has announced that SEML has now signed loan agreements with a syndicate of banks including Japan Bank for International Cooperation (JBIC) for the expansion of the project.
In this expansion of the project, a second unit will be built on a site adjacent to the existing unit which began commercial operation in December 2019, and the generating capacity of the project will increase to approximately 170 MW – roughly double the current capacity – with estimated total project costs of ¥70 billion. A long-term power purchase agreement effective until 2052 has been signed with PT PLN, Indonesia’s state-owned power company, and the commencement of construction is amide for March 2025, with commercial operation in 2027. Once the new unit goes into commercial operation, the project combining Units 1 and 2 is expected to contribute to supplying electricity equivalent to the power usage of approximately 900 000 households in Sumatra Island, Indonesia. Further expansion of the project up to 66 MW is also expected in the future.
Sumitomo Corp., in consortium with Indonesian engineering companies, PT Inti Karya Persada Tehnik and PT Wasa Mitra Engineering, has also been engaged in EPC of the entire plant. The main equipment such as geothermal steam turbine and generator will be supplied by Fuji Electric Co., Ltd.
This loan is provided as project finance by a syndicate of JBIC, the Asian Development Bank, Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd. and the Hyakugo Bank, Ltd. The loans from the private financial institutions are covered by Overseas United Loan Insurance provided by Nippon Export and Investment Insurance.
This expansion of the Project is being promoted with the support of the governments of Japan and Indonesia under the Asian Zero Emissions Community (AZEC) initiative.
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