IFC, Asia Green Capital to develop wind power in Indonesia

The multilateral institution and the Singaporean investment company have secured a pipeline of projects with a total capacity of 182.5MW.

The International Finance Corporation (IFC), the private investment arm of the World Bank, will support Asia Green Capital Partners (Asia Green Capital), a Singapore-based renewable energy developer and investment company, to co-develop the first wind power project in Indonesia’s South Sulawesi province. 

Through PT Energi Angin Indonesia, a subsidiary, Asia Green Capital has signed a memorandum of understanding with the government of South Sulawesi to develop the 62.5-megawatt (MW) Jeneponto 1 wind farm. 

Set to be connected to the South Sulawesi electricity grid, the project comprises 25 2.5MW wind turbines. It is expected to produce a net annual energy yield exceeding 200 gigawatts per hour – enough electricity to serve more than 450,000 people and help reduce 120,000 tons of carbon dioxide emissions a year.

The project will cost $4 million during the development stage. When it enters the construction phase, which is scheduled in the second quarter next year, it will cost another $140 million to complete.

Asia Green Capital is expected to commit 100 percent of the capital needed for the development of the project, with IFC, one of Asia Green Capital's shareholders, providing 20 percent of the equity and 25 percent of the debt. The institution will invest through IFC InfraVentures, a $150 million global infrastructure development fund that aims to increase the pipeline of bankable projects in developing countries.

“Being one of the first large-scale wind projects in Indonesia, Jeneponto 1 will set a milestone in the country’s renewable energy sector once it is completed,” said Edgare Kerkwijk, Asia Green Capital’s managing director, in a statement. He hopes to complete proprietary work for the project by the end of this year.

The project is expected to be operational by the end of 2017.

Indonesia has potential resources to generate around 9,000MW of wind power, but the existing installed capacity is only 1.9MW.

In addition, around 30 percent of the population has no access to a reliable source of electricity, marking one of the lowest electricity supply rates in Southeast Asia.

“IFC’s support to Asia Green Capital and the Jeneponto 1 wind farm reflects our commitment to helping the Indonesian government increase a reliable electricity supply to more Indonesians, particularly in the eastern part of the country,” said Sarvesh Suri, IFC’s country manager for Indonesia.

Following the launch of this initiative, Asia Green Capital plans to develop other wind power projects across Indonesia, including the 100MW Jeneponto 2 wind farm and 20MW West Timor wind farm.