The Japan International Cooperation Agency (JICA) signed a Loan Agreement (L/A) with the Government of the Republic of Indonesia for the Full Rice Geothermal Power Project and the Competitiveness, Industrial Modernization and Trade Promotion Program Sub-Program 3 in Jakarta on March 30. The signing of the Loan Agreement (L/A) was made by the Ministry of Finance of Indonesia. The signatures were exchanged between Mr. Sumint, Director General of Directorate General of Budget, Finance and Risk Management, Ministry of Finance of Indonesia, and Ms. Sachiko Takeda, Director of JICA Indonesia Office.
Over the years, Japan has supported Indonesia’s sustainable growth and socioeconomic stability through ODA. Indonesia plays an important role in the development and stability of the ASEAN region and is an encouraging partner for Japan in its efforts to solve the challenges of the international community.
The Full Rice geothermal power project is a cooperation project in the field of geothermal power generation, in which Japan has been a world leader in technology, and will contribute to increasing the power supply and mitigating climate change in Indonesia, as well as promote the “Asian Zero Emissions Community (AZEC)” (*1) and “Fair Energy Transition Partnership ( (*1) and the Fair Energy Transition Partnership (JETP) (*2).
The Competitiveness, Industrial Modernization and Trade Promotion Program Sub-Program 3 will contribute to the revitalization of business in Indonesia by improving the investment and trade environment in the country. With more than 1,600 Japanese companies operating in Indonesia, it is the second largest among ASEAN countries after Vietnam and Thailand, and is expected to improve the business environment for Japanese companies operating in the country.
(*1) The Asian Zero Emissions Community (AZEC) is a framework proposed by Japan in January 2022 to enable Indonesia and other Asian countries to share the same philosophy of promoting decarbonization and to cooperate in advancing energy transition, Japan contributes to regional and global decarbonization while leveraging its diverse range of decarbonization technologies and financing.
(*2) The Japan Fair Energy Transition Partnership (JETP) is an international framework in which major donors, including G7 countries and the Asian Development Bank, cooperate to provide policy and financial support for the transition from fossil fuels to renewable energy. In Indonesia, the JETP was officially launched in 2022 when the Indonesian government and partner countries including Japan and the United States agreed to a joint statement. Currently, Japan and Germany, as co-lead countries, are supporting Indonesia in the transition process of expanding the introduction of renewable energy, improving the power grid, and phasing out coal-fired power generation.
The projects covered by the yen loan agreement signed this time are as follows
Project Summary
Full Rice Geothermal Power Project
Hululais Geothermal Power Plant Project
Country (Region)
Republic of Indonesia (Bunkeru Province)
Business Objectives
The project is to construct a full rice geothermal power plant in Bungkulu Province, Indonesia, and connect it to the Sumatra grid to increase the power supply and improve the stability of the grid, thereby contributing to economic development and climate change mitigation in the Sumatra region by improving the living standards and investment environment in the region.
Business
(a) Construction of two geothermal power plants
(a) Construction of power transmission and substation facilities
(c) Consulting services (detailed design, bidding assistance, construction supervision, support for environmental and social considerations, etc.)
Loan amount (maximum)
29,156 million yen
Interest Rates
Body: 0.3% Consulting and services: 0.01
Redemption period
30 years (including 10 years of deferment)
Procurement Conditions
General untied
Implementing Agency
Indonesia’s National Electricity Corporation (PLN)
Contribution to the achievement of the SDGs
Goal 7 (Energy for All and Clean)
Goal 13 (take concrete action on climate change)
Schedule for future project implementation (tentative)
Project completion date: 2030
Competitiveness, Industrial Modernization and Trade Promotion Program, Subprogram 3
Competitiveness, Industrial Modernization and Trade Acceleration Program, Subprogram 3
Country (Region)
Republic of Indonesia (all of Indonesia)
Business Objectives
To promote private investment in Indonesia by providing financial assistance to improve the business and investment environment, thereby contributing to the country’s economic and social stability and development efforts.
Business
Through financial assistance, the Government of Japan will support the improvement and steady implementation of policies and institutions in the three areas of “1. creation of a smooth business environment,” “2. mitigation of trade barriers,” and “3. growth and expansion of companies” agreed upon and established by the relevant Indonesian ministries and agencies to promote investment and trade.
Loan amount (maximum)
50 billion yen
Interest Rates
2.20% (2.20%)
Redemption period
15 years (including 5 years of deferment)
Procurement Conditions
General untied
Implementing Agency
Office of the Minister for Economic Coordination
Contribution to the achievement of the SDGs
Goal 1 (Eliminate poverty)
Goal 5 (Achieve gender equality)
Goal 8 (both job satisfaction and economic growth)
Goal 10 (Eliminate inequality among people and nations)
Goal 13 (take concrete action on climate change)
Schedule for future project implementation (tentative)
Scheduled completion of the project: May 2026 (project completion upon loan execution)
The project is co-financed by the Asian Development Bank (ADB, with a planned loan amount of US$500 million) and the German Finance Corporation for Reconstruction Finance (KfW, with a planned loan amount of €400 million), and will be implemented in close cooperation.
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