Jakarta, March 21, 2019 —IFC, a member of the World Bank Group, has committed to provide a $50 million loan facility to an Indonesian power producer, PT Medco Ratch Power Riau (MRPR). The MRPR project—a 275-megawatt gas-based power plant in Riau province—aims to address the increasing electricity deficit in Riau, especially during peak hours.
With growth over nine percent per year, the demand for electricity in Indonesia underscores the country’s growing investment needs. Almost 20 million people in Indonesia—seven percent of the population—lack access to electricity. Further, Indonesia is the fourth most populated country in the world and among the 10 largest greenhouse gas emitters. In response, the government is aiming to reduce carbon emissions by 29 percent by 2030.
“With this financial support from IFC and other lenders, we look forward to providing more affordable and environmentally friendly energy to meet our country’s growing electricity needs,” said Hartono Indriyanto, President Director, MRPR.
In addition to IFC, the Asian Development Bank (ADB), MUFG Bank, and Sumitomo Mitsui Banking Corporation will provide financing towards the project, which is estimated to cost up to $293 million. The project will generate and sell electricity to PT Perusahaan Listrik Negara (Persero), or PLN, which will boost the supply of electricity required for sustaining economic growth in the Riau Province.
Currently, the Riau system relies on imports from West Sumatra, where the demand-supply gap is also increasing. Given the scenario, the development of new power generation capacity is critical to meet Riau’s growing electrification and industrialization demands.
“IFC finances electricity generation, transmission, and distribution upgrades in developing countries, with a particular focus on natural gas and renewable energy such as solar, wind, and hydropower,” said Azam Khan, IFC Country Manager for Indonesia, Malaysia and Timor Leste. He added, “Attracting commercial finance and private expertise is becoming more critical in developing vital projects such as the Riau gas IPP project. IFC is pleased to support MRPR, which serves as a model for other projects in Indonesia’s 35GW power development program.”
About IFC IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
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