The Overseas Private Investment Corporation has approved $120 million in financing for a 72MW wind farm in Indonesia, a project aimed at meeting the country’s growing electricity demand.
The 20-year loan to Energi Bayu Jeneponto will support construction of the $160 million wind farm in the South Sulawesi province. The project has a 30-year power purchase agreement with Perusahaan Listrik Negara, the government-owned electricity distributor.
The loan comes as Indonesia looks towards renewable energy to help boost power generation, which has fallen short of the country’s electricity demand. The government aims to generate 23 percent of its energy from renewable sources by 2025, up from 6.8 percent last year.
The project’s sponsor, Singapore-based Equis Energy, has been active in Indonesia’s renewables sector, targeting equity investments topping $500 million through early 2019.
“Indonesia is set for a period of rapid, sustained growth in energy demand, and the Indonesian government has set sensible targets for renewable energy to satisfy a large share of this demand,” Equis chief executive David Russell said earlier this year. “Equis is committed to leveraging our experience and expertise in Indonesia to support these government initiatives and to deliver low cost power and jobs for the benefit of local communities.”
OPIC, a government agency focused on helping US companies invest in emerging markets, was launched in 1971 and holds more than $20 billion in assets under management. In an interview last year with sister publication Private Equity International, Elizabeth Littlefield, then OPIC’s chief executive, pointed to renewable energy in emerging markets as one of the most active sectors for the agency.