JICA signs loan agreement to support Hululais geothermal project in Indonesia
Drilling operations at the Hululais geothermal site in Sumatra, Indonesia (source: Pertamina Geothermal Energy)
Carlo Cariaga
31 Mar 2026
JICA has signed a JPY 29 billion low-interest loan agreement to support the 110-MW Hululais geothermal project in Sumatra, Indonesia.
The Japan International Cooperation Agency (JICA) has signed an agreement with the Government of the Republic of Indonesia to provide a Japanese Official Development Assistance (ODA) loan for the Hululais geothermal power project in the Bengkulu province in Sumatra, Indonesia. The loan amount is JPY 29.156 billion (approx. USD 182 million), payable in 30 years with a 10-year grace period, at an annual interest rate of 0.3%.
PT PLN (Persero) was assigned as the executing agency for the loan. The project covers:
- The construction of two geothermal power plants
- The construction of power transmission, substation, and distribution facilities
- Consulting services (detailed design, tender assistance, construction supervision, support for environmental and social considerations, etc.)
The development plan, as detailed by PT Pertamina Geothermal Energy (PGE), envisions the construction of two geothermal power plants with capacities of 55 MW each. The target operations date for the geothermal power facility is in 2030. PGE had drilled exploration wells in Hululais as far back as 2012, thus validating the resource.
JICA funding for the Hululais had already been considered back in 2015, but ultimately did not push through because of Indonesia’s regulations on Domestic Component Level (TKDN) for geothermal projects. At the time, the TKDN requirement was at 33%. This had then been described as bottleneck for investment, as many components for geothermal power generation facilities had to be sourced abroad.
In 2024, TKDN requirements for geothermal and other renewable power facilities were relaxed under ESDM Ministerial Regulation No. 11. Under the new regulations, TKDN for geothermal power projects below or at 60 MW capacity was set at 24%, while projects above 60 MW capacity needed a TDK of 29%. Moreover, TKDN requirements no longer apply for projects funded by an offshore grant or loan, granted that at least 50% of the funds are from a multilateral or bilateral creditor.
Source: JICA, Dunia Energi, and HHP Law Firm
