Enel Green Power (EGP), in consortium with PT Optima Nusantara Energi (PT ONE), has secured the right to hold the license to identify geothermal resources and develop the 55MW Way Ratai geothermal power project in Indonesia.

Enel will investing about $30m for the exploration phase of Way Ratai project, which will be situated in the country's Lampung province.

Tender for the project was launched by Indonesia’s Ministry of Energy and Mineral Resources in December, 2015 and it will be the first renewable project to be developed by EGP in the country.

The project is expected to be completed by 2022 and it depends on the outcome of the exploration phase. For the exploration phase, EGP and PT ONE will jointly establish and own a special purpose vehicle (SPV), with EGP holding majority stake.

As per the tender rules, if the project is successful, it will produce about 430GWh of electricity per year, which will be sold to the national utility PLN (Perusahaan Listrik Negara) for a period of 30 years under a power purchase agreement.

EGP said  Indonesia is of particular interest to EGP because of the vast untapped geothermal potential present in the country, which is estimated to produce about 23GW of energy that is about 40% of the geothermal projects in the world.

Apart from this, Indonesia also needs to produce electricity for a country with GDP growth rate of 5% per annum and low electrification rate of 27% or 250 million people without access to electricity.

Recently, Enel signed a memorandum of understanding with the PLN to evaluate projects for electricity generation in Indonesia starting by jointly assessing local markets for renewables, conventional technologies and mini-grids.