The U.S. International Development Finance Corporation's (DFC) Deputy Chief Executive Officer (DCEO) Nisha Biswal today (May 22) announced a new, up to $126 million DFC commitment for the Indonesian power company PT Medco Cahaya Geothermal, an investment that will help strengthen Indonesia's energy security and contribute to advancing its shared economic goals with the United States.
The DFC commitment for the company is in coordination with Indonesian infrastructure bank PT SMI, the current project financing lender. It will support the development and operation of a new 31MW net generation Phase I power plant, Ijen Geothermal, which will increase renewable power generation in East Java - one of the country's most densely populated provinces with 40 million people - and provide much-needed low-carbon baseload power generation capacity to the Java-Bali grid, Indonesia's largest power system.
Indonesian officials and analysts alike consider power grid improvements as key to supporting the Just Energy Transition Partnership, or JETP, that Indonesia developed with other world leaders during its G20 presidency.
The project represents the latest example of Indonesia's engagement with the U.S. Government across several critical sectors, including financing for infrastructure and renewable energy, and support for small businesses - all in service of advancing top Indonesian priorities at home and throughout the region.
"The Ijen Geothermal power plant is a key part of Indonesia's ambitious strategy for an energy transition," said DCEO Nisha Biswal. "This project also reinforces our shared goals through the U.S.-Indonesia Comprehensive Strategic Partnership, which will enhance economic and energy security for both of our countries."
DCEO Biswal joined representatives from PT Medco Power Indonesia, a subsidiary of PT Medco Energi Internasional Tbk and Ormat Technologies Inc. in Jakarta, Indonesia, for a ceremonial commitment signing.
In November 2023, DFC announced $131 million in new investments in small businesses and women's economic empowerment in Indonesia.
DFC's goal of advancing private sector investments in Indonesia supports the U.S.-Indonesia Comprehensive Strategic Partnership and aligns with several of the U.S. Government's priorities, including the Indo-Pacific Strategy, the Indo-Pacific Economic Framework, and the Partnership for Global Infrastructure and Investment, as well as Indonesia's JETP.
The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, infrastructure, agriculture, and small business and financial services. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
