Enel says it is to invest up to $30 million in the exploration phase of a new geothermal energy project in Indonesia.
The Italian firm has been awarded the license for the exploration and development of the 55 MW Way Ratai project in Lampung province. It will develop the project in partnership with local firm PT Optima Nusantara Energi (PT ONE), it said.
The project marks Enel’s entry into Indonesia’s renewable energy market. “Indonesia is the largest economy in Southeast Asia and one of the world’s main emerging markets,” said Francesco Starace, CEO and General Manager of Enel. “This award represents a first step forward for the growth of Enel’s activities in the area.
“The award is also the starting point from which we intend to build a solid platform for future investment opportunities in the country.”
Construction of the geothermal power plant, which depends on the results of the exploration phase, is expected to be completed and enter operation in 2022. Enel and PT ONE will jointly establish and own a special purpose vehicle (SPV) holding the project, with Enel having the majority stake in the SPV.
In line with the tender rules, the energy produced by the geothermal power plant, which is expected to generate around 430 GWh per year, will be sold to the national utility PLN under a 30-year power purchase agreement (PPA).
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