Ministry of Energy and Mineral Resources Republic of Indonesia 1

Firenze, September 11th 2017

MINISTRY OF ENERGY AND MINERAL RESOURCES OF REPUBLIC OF INDONESIA

by:

Hendra Iswahyudi

Ministry of Energy and Mineral Resources

Republic of Indonesia

GEOTHERMAL IN INDONESIA“Unlocking Geothermal Investments: Challenges and Opportunities”

Presented at High Level Conference of The GGA

Ministry of Energy and Mineral Resources Republic of Indonesia 2

Installed Capacity Target Capacity Additional Capacity

0 37110

7.560 35

205 215 165 220

866

450

858

650

1,175

999

0

500

1000

1500

2000

2500

3000

-

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

8,000.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Ad

dit

ion

al C

apac

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(MW

e)

Cap

acit

y(M

We)

Installed Capacity Upadated July

2017: 1,698.5 MW (Additional Capacity from GPP

Ulubelu Unit 4 on April 25th , 2017 for

55 MW)Additional COD Plans for 2017:

▪ GPP Sarulla Unit 1 for 110 MW

▪ GPP Karaha Unit 1 for 30 MW

▪ GPP Sorik Marapi (modular) 20 MW

Indonesia become World

No.2 exceedPhilippines

Indonesia become World

No.1 exceedUnited States

TARGET AND MILESTONE OF GEOTHERMAL DEVELOPMENT

*Assumption: Philippines (1.870 MW) and US (3.450 MW) not performing any capacity increment

Ministry of Energy and Mineral Resources Republic of Indonesia 3

Assignment for SOEThe Government will give particular assignment for Geothermal SOE to develop concession including

upstream and downstream based on Geothermal Law No. 21/2014

Preliminary Survey Assignment + ExplorationInvestors who meet the requirements allowed to have opportunity to obtain a Preliminary Survey

Assignment up to Exploration stage. As the incentive, concession will be tendered using direct selection

mechanism.

Ceiling PriceFor further acceleration, Government will implement a ceiling price mechanism, in which the tender will

based on work programs and exploration commitment while the tariff will be set by the Government.

ACCELERATION FOR GEOTHERMAL DEVELOPMENT

Simplifying the Licensing ProcessOne-Stop Service Center (PTSP) at Investment Coordinating Board (BKPM), eliminating unnecessary

licences, shorten the time period

Incentives (fiscal & non-fiscal)Tax allowance, tax holiday & Government Guarantee

Geothermal FundAllocate USD 300 million on national budget for geothermal exploration

Resource Optimalization on Giant FieldEncourage PGE and GDE to develop another geothermal system inside the concession

Ministry of Energy and Mineral Resources Republic of Indonesia 4

4

Investment opportunities:

Access to Geothermal Resources for Investors:

• Preliminary Survey Assignment + Exploration;

• Obtain geothermal concession through open tender mechanism.

Other business opportunities in geothermal sector:

• Geothermal direct use;

• Low temperature geothermal potential;

• Small scale power plant;

• Services company to support the core business of geothermal.

Recent Updates:

Commercial Operation Date (COD) of 4 projects (215 MW):

➢ GPP Ulubelu Unit 4: 55 MW (April, 25th 2017)

➢ GPP Karaha Bodas: 30 MW (November 2017)

➢ GPP Sarulla Unit 2: 110 MW (December 2017)

➢ GPP Sorik Marapi (Modular Unit) 20 MW (December, 2017)

2 concessions (130 MW) succesfully tendered and license issued;

30 concessions (1725 MW) are going to be tendered in the near future

(6 concessions (295 MW) tendered in 2017);

5 concessions (210 MW) assigned to SOE.

Ministry of Energy and Mineral Resources Republic of Indonesia 5www.esdm.go.id

MINISTRY OF ENERGY AND MINERAL RESOURCES OF REPUBLIC OF INDONESIA