Forestry licenses, the commercialization of the guarantee process, lack of ministerial coordination and costly land acquisition are key challenges for investors
JAKARTA (18 April 2012) – In response to heightened investor interest in Indonesia’s geothermal resources, the government issued Regulation No. 139 in August 2011 in which the Government of Indonesia guarantees the financial obligations of PT PLN, under their power purchase agreements.
However, the changes may not provide sufficient legal certainty to stimulate immediate investment.
The main challenges for geothermal developers include uncertainty governing the price of electricity, as well as land acquisitions issues. While several new regulations attempt to provide greater clarity with regards to price, the implications of a recent land acquisition law remain unclear.
While Regulation No. 139 seems to have improved the form and structure of the guarantee, many believe that the guarantee is not sufficient to ensure the realization and sustainability of power plant projects as the guarantee does not cover risks beyond the possible non-payment by PLN.
There remain various non-financial issues that are not guaranteed such as difficulties in obtaining forestry licenses, the commercialization of the guarantee process, lack of ministerial coordination and costly land acquisition. Moreover, the guarantee also does not the cover pre-commercial operation period, meaning that any issues that may cause delays to the commercial operation are not covered by the guarantee.
Investors will participate in a dedicated panel discussion to address the above issues at 9:30am at The World Geothermal Energy Summit 2012 (4-5 July 2012, Jakarta).
The international conference will bring together all the stakeholders (key developers, financiers and investors) from across the geothermal spectrum to find solutions to financial, regulatory and technical challenges, and to increase the role of geothermal in the world’s energy mix in government setting.
About WGES Program Design
The conference will be divided into 5 sessions designed to specifically address your business-critical challenges, such as:
* Can geothermal industry overcome challenges to raising capital?
* Geothermal price policy in Indonesia: Why has Indonesia been unable to explore its geothermal potential for the benefit of the people?
* Gold standards in geothermal energy development: Which global projects are exemplary and what are their secrets to success?
* Is there a better way to develop, operate and maintain geothermal plants?
* What are the critical issues for investors?
Request our brochure now to join as a delegate or share your technology with the geothermal society!
Join the world’s geothermal industry leaders at WGES 2012 by registering today!
§ Visit www.ArcMediaGlobal.com/Geothermal
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Undeniably, this is the place to match global financing and technology with erupting growth markets in the world’s geothermal community.
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