Project Performance Evaluation Report for PT. Supreme Energy Muara Laboh – Muara Laboh Geothermal Power Project (Indonesia) Loan 3487

Evaluation Document | 01 April 2024
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Project Performance Evaluation Report for PT. Supreme Energy Muara Laboh – Muara Laboh Geothermal Power Project (Indonesia) Loan 3487

Indonesia’s power demand was estimated to increase by 8.5% per annum in 2015-2019, resulting in a shortage of about 35 gigawatts (GW) before 2020. Moreover, in 2015, fossil fuels powered 88% of the electricity generation in Indonesia, while renewables, primarily in the form of hydropower and geothermal resources, accounted for the remainder. To address the anticipated electricity shortage and reduce dependence on fossil fuels, the Government of Indonesia launched a program in 2015 to provide an additional 35 GW of power capacity by 2019. In December 2016, the Asian Development Bank (ADB) Board of Directors approved a 20-year nonsovereign loan of $70 million from ADB’s ordinary capital resources to PT. Supreme Energy Muara Laboh for the development and construction of the 80-megawatt Muara Laboh Geothermal Project in Indonesia.  

The project’s expected impacts were to contribute to the government’s goal of increasing the share of renewable energy in the country’s energy supply and reducing greenhouse gas emissions while the expected broad outcome was to expand geothermal power generation in West Sumatra. The main objective of this evaluation is to assess the performance of the project towards achieving its objectives, particularly if the project has promoted environmentally sustainable growth and private sector development through the expansion of geothermal baseload power generation. The evaluation is envisaged to derive lessons that can assist in the design and implementation of future ADB private sector operations, particularly similar investments in the renewable energy sector in Indonesia and other ADB developing member countries.