Tender Procurements and Contract Opportunities Indonesia

JAKARTA: The government is asked to bear the cost involved initial exploration of geothermal project development in order to minimize the risk of failure and provides business certainty for investors.

Project Director of PT Medco Energi Mahfoedz Lukman expressed initial exploration costs to be borne by investors is one of the bottlenecks in the development of geothermal projects in Indonesia.

In fact, he said, investors do not know how big the potential for geothermal reserves that can be cultivated in the region.

"Until now, this initial exploration is still borne by investors. If initial exploration is no way the government handled specially, it would be better. The risk of failure for more terminimalisir investors," he said in the event IKA-ITS Business Summit, today.

When making a geothermal project with the government, he explained, investors can not actually know the potential of geothermal reserve that will be tilled so that obstacles for the developer.

"The possibility of success or not also can not be predicted by investors. That [fails or is not] really felt investors after the initial exploration."

According to him, of Indonesia's geothermal potential to reach 28 gigawatt (GW), if converted to oil could reach 12 billion barrels. In fact, Indonesia's oil potential is lower than that, only 8 billion barrels.

"If it's already a good rate, the highest benchmark price set by the government amounted to U.S. $ 0.097 per kWh. What remains to be a constraint, who will fund the initial exploration of this," said Lukman.

On the other hand, Staff Advisor to the Minister of Energy and Mineral Resources (ESDM) Purnomo Hadi geothermal rate subsidies to the state electricity company PT (Persero) will provide certainty for developers of geothermal.

"One who never thought of any government is the price specified in the tender, was purchased by PLN. If it should be subsidized by the government should subsidize it. This will provide certainty to investors and ensure that the company will purchase costs that have been defined in the tender documents."

He was not dismissed there is no guarantee of PLN will buy electricity geothermal accordance with a tendered price on one of inhibiting the development of new renewable energy is.

"But we're this inventory. In fact, we're already planning to find a solution in a working meeting to be held on geothermal energy in the near future," said Hadi.

Members of the House of Representatives Commission VII Satya W. Yudha assess the amount of the selling price of geothermal power in Indonesia is still much lower compared with other countries, also became one of the factors inhibiting the development of geothermal energy.

"If we follow the geothermal conference in Bali some time ago, the selling price of geothermal power in Europe could reach U.S. $ 0.3 per kWh. Obviously many geothermal specialist contractors who do not want to do geothermal projects in Indonesia," he said. ( yn) By: Nurbaiti (Bisnis.com)

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