Sumitomo, along with PT. Supreme Energy and Engie, has started the construction of the Muara Laboh geothermal power project in the West Sumatra Province in Indonesia.
Expected to commence production in October 2019, the project is expected to cost around JPY70bn ($628m).
Under a 30-year power purchase agreement with the project firm PT. Supreme and PT. PLN, the geothermal plant will be able to power generation capacity of 80MW.
Sumitomo and PT. Rekayasa Industri will carry out the engineering, procurement and construction (EPC) work on the project, while Fuji Electric will supply the main equipment such as geothermal steam turbine and generator.
The project will also secure funding through project financing by Japan Bank for International Cooperation (JBIC), Asian Development Bank (ADB), Mizuho Bank, Sumitomo Mitsui Banking, The Bank of Tokyo-Mitsubishi UFJ and the Leading Asia’s Private Infrastructure Fund (LEAP)/
With a total potential of about 29,000MW, Indonesia is claimed to hold second largest amount of potential geothermal power resources across the globe.
The Indonesian government is encouraging the development of geothermal power generation to reach 7,000MW generating capacity by 2025.
Sumitomo, along with its wholly-owned subsidiary, Sumisho Machinery Trade (SMT), is said to hold about 50% of all completed geothermal power projects in the country.
In March 2016, Sumitomo had begun construction on the 240MW Kinyerezi natural gas-fired combined cycle power plant in Tanzania.
Planned to be commissioned in early 2018, the power plant will be handed over to Tanesco in September 2018.