ADB Reiterates Support to Advancing Geothermal Electricity Generation in Indonesia - Asian Development Bank
Published November 22, 2025
ADB Reiterates Commitment to Enhancing Geothermal Electricity Generation in Indonesia
The Asian Development Bank (ADB) has reaffirmed its dedication to promoting geothermal electricity generation in Indonesia, a country rich in geothermal resources. This commitment comes at a time when Indonesia is striving to increase its renewable energy capacity, aiming to meet both domestic energy needs and international climate commitments.
With a significant portion of the world’s geothermal resources located in Indonesia, the country is recognized as a leader in geothermal energy production. The ADB's ongoing support is crucial for the development of this sector, which has the potential to play a vital role in Indonesia's energy transition.
Geothermal Potential in Indonesia
Indonesia is situated on the Pacific Ring of Fire, which provides it with an immense geothermal potential estimated at around 28,000 megawatts (MW). However, only approximately 2,100 MW of this potential has been harnessed as of now. The government has set ambitious targets to increase geothermal energy production, aiming for 7,200 MW by 2025 as part of its broader strategy to diversify energy sources and reduce reliance on fossil fuels.
Geothermal energy is a renewable energy source that can provide a stable and continuous supply of electricity, making it an attractive option for Indonesia's energy landscape. The ADB's support is focused on enhancing the capacity of local institutions, improving regulatory frameworks, and facilitating investments in geothermal projects.
ADB’s Role and Initiatives
The ADB has been actively involved in financing and supporting geothermal projects in Indonesia for several years. This includes providing technical assistance, funding feasibility studies, and supporting the development of necessary infrastructure. The bank's initiatives aim to reduce the financial risks associated with geothermal exploration and development, which can be considerable due to the high upfront costs and the uncertainties involved in drilling.
In recent years, the ADB has approved several projects aimed at enhancing geothermal energy generation in Indonesia. These projects are designed to strengthen the capacity of local governments and private sector stakeholders in managing geothermal resources effectively. By providing expertise and financial support, the ADB is helping to create a more favorable environment for investment in geothermal energy.
Recent Developments
Recently, the ADB announced its collaboration with the Indonesian government to develop a comprehensive geothermal roadmap. This roadmap will outline strategic actions to accelerate the exploration and development of geothermal resources across the country. The initiative aims to streamline processes, improve regulatory frameworks, and enhance coordination among various stakeholders involved in geothermal energy development.
Additionally, the ADB is working on capacity-building programs to equip local institutions with the necessary skills and knowledge to manage geothermal projects effectively. These programs are essential for ensuring that Indonesia can maximize its geothermal potential and meet its renewable energy targets.
Investment and Economic Impact
The ADB's support for geothermal energy development in Indonesia is expected to attract significant investments, both from domestic and international sources. By reducing the perceived risks associated with geothermal projects, the ADB aims to encourage private sector participation in the development of this renewable energy source.
Investments in geothermal energy not only contribute to the energy transition but also have broader economic benefits. They can create jobs, stimulate local economies, and provide a reliable source of electricity to support industrial growth. As Indonesia continues to develop its geothermal resources, the economic impact is expected to be substantial.
Environmental Benefits
Geothermal energy is one of the cleanest forms of energy available, producing minimal greenhouse gas emissions compared to fossil fuels. By investing in geothermal electricity generation, Indonesia can significantly reduce its carbon footprint and contribute to global efforts to combat climate change.
The ADB's initiatives in supporting geothermal energy development align with Indonesia's commitments under the Paris Agreement, which aims to limit global warming and promote sustainable development. By harnessing its geothermal resources, Indonesia can transition to a more sustainable energy system while also addressing its energy security needs.
Conclusion
The Asian Development Bank's continued support for geothermal electricity generation in Indonesia is a critical component of the country's energy strategy. With substantial geothermal resources and the backing of the ADB, Indonesia is well-positioned to enhance its renewable energy capacity, reduce reliance on fossil fuels, and achieve its climate goals. The collaboration between the ADB and the Indonesian government will play a vital role in unlocking the full potential of geothermal energy, benefiting both the economy and the environment.
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