en.Wedoany.com Reported - The Japan International Cooperation Agency (JICA) has signed an agreement with the Indonesian government to provide Official Development Assistance (ODA) loans for the Hululais geothermal power project in Bengkulu, Sumatra. The total loan amount is 29.156 billion yen (approximately USD 182 million), with a repayment period of 30 years, including a 10-year grace period, and an annual interest rate of 0.3%.

Indonesian state-owned power company PT PLN has been designated as the loan executor. The project plans to construct two geothermal power plants, each with an installed capacity of 55 megawatts, and is expected to commence operations in 2030. Previously, Indonesia's geothermal company PGE completed exploration well drilling at Hululais, confirming the feasibility of the geothermal resources.

JICA's consideration of funding for the Hululais geothermal project began in 2015 but was put on hold at the time due to Indonesia's Domestic Content Level (TKDN) regulations. The TKDN requirement was 33% then, which was seen as an investment barrier as most geothermal power generation equipment needed to be imported.

In 2024, Indonesia's Ministry of Energy and Mineral Resources issued Regulation No. 11, relaxing TKDN requirements for projects involving new energy sources such as geothermal. Under the new regulation, the TKDN for geothermal projects with an installed capacity not exceeding 60 megawatts is reduced to 24%, and for projects exceeding 60 megawatts, it is 29%. For projects supported by overseas grants or loans, if at least 50% of the funding comes from multilateral or bilateral institutions, the TKDN requirement is exempted.

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