Australia–Indonesia Strengthen Clean Energy Partnership with a Milestone in Muara Laboh

Muara Laboh: Australian Deputy Ambassador to Indonesia, Gita Kamath, visited the Muara Laboh geothermal site in West Sumatra to mark the start of the power project's expansion, a milestone in Indonesia's clean energy transition.

Indonesia has the world's largest geothermal potential and is prioritizing geothermal power which harnesses the earth's natural heat to produce clean, reliable baseload electricity.

Deputy Ambassador Kamath said he was delighted to witness the start of the expansion.

"Australia and Indonesia are working together to harness the economic opportunities of an inclusive energy transition. This project demonstrates how blended finance can unlock private capital for high-impact, low-carbon projects critical to achieving net-zero targets" he said, as quoted from the Australia Embassy Jakarta.

Australia played a catalytic role in financing the Muara Laboh expansion by providing a USD $15 million concessional loan through the Australian Climate Finance Partnership. The loan is part of Asian Development Bank's USD92.6 million financing agreement with PT Supreme Energy Muara Laboh for Muara Laboh Unit 2 Project.

The generated electricity from Muara Laboh will contribute to the renewable energy mix in the Sumatra electricity grid, powering about 435,000 households.

The expansion of Muara Laboh integrates a Gender Action Plan promoting leadership and skilled job opportunities for women, paid STEM internships for female graduates and inclusive HR policies. More broadly, the project, which is expected to be completed by end of 2027, prioritizes local job creation, community engagement and environmental stewardship in Solok Selatan Regency to ensure the energy transition benefits local communities.

Blended finance is also a key focus area for KINETIC - The Australia-Indonesia Climate and Infrastructure Partnership.