ADB provides $350m loan for Indonesian geothermal plant

y0MANILA, Mar 31 (Xinhua): The Asian Development Bank (ADB) said Monday that it has provided a loan of US$350 million for the construction of a 320-megawatt geothermal power plant in North Sumatra, Indonesia.

Under the loan package for the Sarulla Geothermal Power Development Project, the Manila-based lender said $250 million will come from its ordinary capital resources while $80 million will come from the ADB Clean Technology Fund. The remaining $20 million will be drawn from the Canadian Climate Fund for Private Sector in Asia.

The project requires a total loan package of $1.17 billion. Six commercial banks will also co-finance the loan package while the ADB and the Japan Bank for International Cooperation acted as lead structuring banks.

Proponents of the project are Itochu Corp., Kyushu Electric Power Co., Ormat International, and Medco Power Indonesia.

The project will be developed and implemented under a 30-year energy sales contract with Perusahaan Listrik Negara, the national electricity utility company, a 30-year joint operating contract with Pertamina Geothermal Energy, and a 20-year guarantee from Indonesia's Ministry of Finance.

The ADB said in a statement that its climate finance capabilities were instrumental in establishing the first commercially-financed, utility-scale geothermal independent power plant in Indonesia in more than a decade.

It added that the climate funds were structured as an " innovative" loan tranche that bridged the financing gap between banks and investors to maintain the financial viability of the project.