U.S. HELPS INVESTORS TARGET CLEAN ENERGY OPPORTUNITIES IN INDONESIA

Thursday, June 25, 2009

Jakarta – Opportunities to finance clean energy projects drew more than 100 industry experts and investors to today’s Indonesia Clean Energy Investor Forum. The forum showcased projects from a competition sponsored by the U.S. Agency for International Development (USAID) and the Private Finance Advisory Network (PFAN). PFAN is a multi-lateral public-private partnership that was established by the International Energy Agency’s Climate Technology Initiative and is managed by USAID in Asia.

The PFAN Indonesia Clean Energy Investor Forum serves as a platform for Indonesian energy entrepreneurs to showcase their ideas to investors. Nine finalists were chosen by PFAN in the run-up to the Indonesian Business Plan competition. Each of the companies received mentoring and one-on-one coaching before formally making their investment pitch at the forum.

The total value of investments for the nine finalist projects is more than US$370 million, comprising both debt and equity financing. In addition to offering promising investments, these projects have the potential to reduce greenhouse gas emissions by more than 1 million metric tons of carbon dioxide per year, according to USAID. Based on today’s presentations, a panel of judges will select two Clean Energy Financing Award winners for Indonesia.

“By bringing together clean energy entrepreneurs and investors, the PFAN Indonesia Clean Energy Investor Forum is helping to address the barriers that clean energy businesses face in seeking financing,” said Walter North, USAID Indonesia Mission Director. “There are many creative, viable clean energy solutions in Indonesia. The objective of the Forum is to make it easier for investors to identify and fund the best projects.” USAID believes this is a necessary first step to scale up investments to create a mature clean energy market in Indonesia.

Some Q & A discussed includes:

Q : What stage is the company now in securing contracts and what made

you so sure that the company will eventually win all the rights to mine,

develop and provide geothermal energy?

A : BGS is a Banten provincial government-owned company that has spent

significant amount of resources to carry out initial feasibility study and

obtain exploration studies carried out by Pertamina and the Ministry of

Energy and Mineral Resources. This type of close relationship has enabled

the company to secure all the necessary legal documents and formal

permissions to carry out mining/exploration activities.

Q : What is the project payback period and do you think it is a sensible

figure?

A : The payback period is 10 years including the exploration period of

approximately 1 to 1.5 years and the considering all the costs and the

purchase price supported with high demand the 10 year payback period can

be considered as sensible figure.

Q : How did you finance earlier ventures?

A : We have earlier received funding from Government of Indonesia, several

grants and private funding.

Q : What stage are you now?

A : Selo Kencana has completed all legal documentation and permits, and is

in the process of obtaining a power purchase agreement with PLN which

consists of two parts. The first one is the Head Agreement which we will

hopefully obtain next month, followed by the full contract agreement in two

months time.

More information can be found at:

1) Indonesia Clean Energy Investor Forum

http://indonesia.usaid.gov/en/Article.370.aspx

2) Forum report

http://www.resourcesaver.org/file/toolmanager/CustomO105C399F99745.pdf