About one-third of Indonesia’s 240 million people, mostly living in rural areas, do not have electricity. To help reach these households, IFC recently invested in PT Medco Power Indonesia, an independent power producer that generates electricity through natural gas and hydroelectric sources. The $25 million investment will support the company’s plan to develop five new power projects, increasing its total generation capacity to about 390 megawatts and providing cleaner electricity to more than two million households by 2016.
IFC’s approximately 11 percent stake in Medco Power was part of a $112 million equity investment arranged by a consortium of financial investors led by Saratoga Capital, an Indonesia-focused private equity manager.
“With electricity demand growing at over nine percent annually, the Indonesian power sector has struggled to meet its required investment needs over the past decade,” said Sandiaga Uno, Founding Partner of Saratoga Capital. “Our partnership with IFC will not only help provide electricity to millions of Indonesians but will also help encourage more private sector investment in Indonesia’s infrastructure sector.”
Not only will PT Medco Power’s projects illuminate rural Indonesian villages, it will also help Indonesia, one of the world’s biggest greenhouse-gas emitters, avoid about 500,000 tons equivalent of carbon dioxide emissions per year.