Indonesia Secures Over US$499 Million AZEC Funding for Geothermal Expansion
Jakarta, The Gulf Observer: Indonesia has secured Rp8.21 trillion (over US$499 million) in funding from the Asia Zero Emission Community (AZEC) to support the development of the Muara Laboh Unit 2 Geothermal Power Plant in Solok, West Sumatra. The financial close was formally concluded in Jakarta on Monday between PT Supreme Energy Muara Laboh and the Japan Bank for International Cooperation (JBIC).
Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that the Muara Laboh Unit 2 plant will have an installed capacity of 88 megawatts, with commercial operations scheduled to commence in 2027. A further expansion, Unit 3, is planned with an additional 60 MW capacity, targeted for completion by 2033.
“This geothermal power plant will have a capacity of 88 megawatts, with a project value of nearly US$500 million,” said Minister Hartarto following the signing ceremony.
The Muara Laboh project is one of several major initiatives being prioritized by the Indonesian government under the AZEC framework. Other key projects include the Legok Nangka Waste-to-Energy initiative, Sustainable Aviation Fuel development, the Sarulla Geothermal Plant, and the Java-Sumatra Transmission Network—all aimed at accelerating Indonesia’s transition to a cleaner and more resilient energy future.
The signing ceremony was attended by former Japanese Prime Minister Fumio Kishida, now serving as Special Envoy for AZEC, underscoring Japan’s continued commitment to green energy cooperation. His visit followed recent bilateral discussions between Indonesian President Prabowo Subianto and Japanese Prime Minister Shigeru Ishiba, in which both leaders reaffirmed their dedication to fostering a green, equitable, and resilient regional economy.
Trade and investment ties between the two nations remain robust. In 2024, bilateral trade reached US$35 billion, while Japanese investment in Indonesia rose sharply to US$3.5 billion—an increase of 52 percent compared to 2021. Japan currently ranks as Indonesia’s sixth-largest investor, with over 12,000 projects across strategic sectors.
“The investment figure represents the trust and confidence of Japanese companies in Indonesia,” Minister Hartarto noted, expressing appreciation for Japan’s leadership in green innovation and its continued support for Indonesia’s economic resilience through AZEC and other partnerships.
“Indonesia deeply appreciates Japan’s commitment to sustainable development,” he added. “This progress reflects both countries’ efforts to foster mutually beneficial economic cooperation and shared prosperity.”
To date, 175 memoranda of understanding have been signed between Indonesian and Japanese stakeholders under the AZEC initiative. Both parties are working actively to convert these agreements into tangible projects through public-private partnerships and cross-sector collaboration.
“The visit of the former prime minister underscores the strength of the Indonesia–Japan partnership in building a low-carbon future,” Hartarto concluded, emphasizing the shared commitment to clean energy transition and green economic development.
