Ijen Geothermal Power Plant, a Form of PT SMI's Seriousness in Supporting the Development of Geothermal Potential

East Java, June 20, 2025 – Indonesia, which is located on the ring of fire, has the second largest geothermal potential in the world, after the United States. With a current potential of 28,000 Megawatts (MW), Indonesia is even predicted to be able to overtake the United States' geothermal capacity in 2027. Unfortunately, until now the utilization of geothermal energy is still relatively minimal compared to the existing potential, which is only 2,100 MW. In fact, geothermal energy is a reliable renewable energy source because it produces energy continuously and does not depend on the weather or season, unlike other renewable energy sources such as solar and wind power.

For this reason, the government is currently aggressively utilizing geothermal potential as an environmentally friendly energy source. An example is the Ijen Geothermal Power Plant (PLTP) in Banyuwangi, East Java, which will soon be inaugurated by President Prabowo Subianto in the near future, which is one of the strategic projects in the development of New Renewable Energy (EBT) in Indonesia. With a total capacity target of 110 MW, the Ijen PLTP is used to produce electricity, which is then distributed to the Java Madura Bali Electricity System electricity network. PTLP Ijen was developed by PT Medco Cahaya Geothermal (MCG) and received financial support from PT Sarana Multi Infrastruktur (Persero) (PT SMI).

PT SMI as one of the Special Mission Vehicles (SMV) under the Ministry of Finance, provides financing facilities of USD 144.9 million from the total project investment needs of USD 205 million. In this support, it also involves the participation and collaboration of international donor institutions, namely Agence Française de Développement (AFD) with a blended finance scheme through the SDG Indonesia One (SIO) platform owned by PT SMI. In addition to AFD, other international donor institutions that support the Project are the Global Green Growth Institute (GGGI) and USAID SINAR in the form of providing Technical Assistants. "This support confirms PT SMI's role as a Development Finance Institution (DFI) in encouraging sustainable development, especially in the green energy sector. By utilizing the abundant geothermal energy potential in the Ijen area, this project not only provides an environmentally friendly and sustainable energy source, but also helps reduce dependence on fossil fuels," said PT SMI President Director Reynaldi Hermansjah.

The presence of the Ijen PLTP supports the government's target to increase the mix of New and Renewable Energy (EBT) from 9% to 23% by 2025, in accordance with the National Medium-Term Development Plan (RPJMN). In addition, it is also in line with the achievement of Indonesia's Net Zero Emission (NZE) target in 2060 or sooner, and in line with global commitments to address climate change. The operation of the Ijen PLTP has the potential to contribute to avoiding Greenhouse Gas emissions of 228,636 to 838,332 tCO₂e/year.

In addition to environmental benefits, the Ijen PLTP project also has significant social and economic benefits for the surrounding community. The construction and operation of this PLTP creates jobs, both directly and indirectly, and opens up new business opportunities that can drive the local economy. Thus, the benefits of this project are not only felt in the form of providing clean energy, but also in improving the welfare of the community around the project area.

Although through a B2B and non-assignment scheme, the financing of the Ijen PLTP is proof that PT SMI's direction as a corporation is in line with the role of PT SMI which is also assigned as the Energy Transition Mechanism (ETM) Country Platform Manager in Indonesia. Since 2022, PT SMI has been trusted by the Ministry of Finance to collaborate with dozens of partner institutions to develop energy transition financing and investment strategies, both in the form of commercial and non-commercial funds such as grants and technical assistance. The institutions that are partners of PT SMI in its role as ETM Country Platform Manager consist of multilateral, bilateral institutions, banks, philanthropies and think tanks. In addition to the Ijen PLTP, PT SMI is also involved in the early retirement efforts of the Cirebon-1 PLTU.

Through the Ijen PLTP, PT SMI is increasingly demonstrating its seriousness in encouraging a sustainable energy transition, while building a foundation for a more resilient and inclusive national energy security in the future. "Despite the challenges, we at PT SMI see that geothermal energy in Indonesia has enormous potential. We are also open to partnering with the private sector and investors both from within and outside the country, who share the same vision as PT SMI in optimizing the use of new renewable energy, including geothermal energy," said Reynaldi.

- end -

About PT Sarana Multi Infrastruktur (Persero) (“PT SMI”)

PT Sarana Multi Infrastruktur (“Persero”) (“PT SMI”), established on February 26, 2009, is a State-Owned Enterprise under the coordination of the Ministry of Finance of the Republic of Indonesia, in the form of a Non-Bank Financial Institution (LKBB). PT SMI plays a role and has a mandate as an agent of sustainable development. PT SMI has 3 business pillars, namely Commercial Financing, Public Financing, and Project Development and Advisory Services.

PT SMI has various functions and unique products / features to support the acceleration of infrastructure development, which not only serves as infrastructure financing but also as an enabler through the implementation of the Government and Business Entity Cooperation (KPBU) scheme, involving various financial institutions both private and multilateral. PT SMI actively supports the implementation of Public Private Partnership (PPP) and encourages the acceleration of infrastructure development in the regions through regional loan products.

For further information, please contact:

Ramona Harimurti
Head of Corporate Secretary Division
PT Sarana Multi Infrastruktur (Persero)
Tel : +6221 8082 5288
Fax : +6221 8082 5258
Email: corsec@ptsmi.co.id
www.ptsmi.co.id