3rd African International Conference on Industrial Engineering and Operations Management

Project Financing Strategy and Financial Feasibility for Geothermal Development Project in Lumut Balai, South Sumatera

Yafiazmi Dhaniswara, Farizal Farizal & Muhammad Dachyar
Publisher: IEOM Society International
0 Paper Citations
Track: Energy

Indonesia is located on the Ring of Fire and has a huge thermal potential of up to 29,000 MW, which is equivalent to 40% of the world's geothermal potential capacity. According to the latest records from the Geological Agency, Indonesia's geothermal potential in December 2019 was 23.9 gigawatts (GW). According to the Geothermal Authority (2019), this potential can only be used for a total potential of 8.9%, or 2,130.6. MW. Even though the government itself is targeting an increase in geothermal utilization to 7,241.5 MW or 16.8% of the total potential capacity in 2025, there is still much that has not been utilized. CNN Indonesia stated the expansion of geothermal energy as a source of renewable energies requires a long time and very high risk. Capital will return in the long term and investors will not explore much in this business. As a result, only a few investors are interested in developing geothermal energy in Indonesia. It is necessary to analyze the project financing to assess whether a geothermal project is feasible or not. In this study, data that were used are qualitative and quantitative data such as using a questionnaire given to experts, policy makers, and producers. This study identifies geothermal project feasibility and calculates the capital return estimation using project financing and capital budgeting method.

Published in: 3rd African International Conference on Industrial Engineering and Operations Management, Nsukka, Nigeria

Publisher: IEOM Society International
Date of Conference: April 5-7, 2022

ISBN: 978-1-7923-9157-6
ISSN/E-ISSN: 2169-8767