USD 65M in geothermal production bonuses for Indonesia community development

Geothermal plant, Indonesia (source: PLN)

From 2014 to the first quarter of 2024, production bonuses from geothermal power projects in Indonesia have amounted to almost IDR 1 trillion (approx. USD 65 million) according to Dr. Gigih Udi Atmo from the Ministry of Energy and Mineral Resources (MEMR). This has gone into development of communities surrounding around the geothermal power projects, such as road construction, lighting improvement, waste management projects, and the provision of clean water supply.

The production bonus income from geothermal businesses in in accordance with the implementation of Law Number 21 of 2014 concerning Geothermal Energy and Government Regulation Number 28 of 2016. The amount to be disbursed is determined by the Geothermal Business Production Bonus Calculation Reconciliation Activity which is routinely carried out by the Directorate General of New Renewable Energy and Energy Conservation (EBTKE) with the MEMR. It is a transparent process with full accountability and representatives from regional governments.

“The realization of the production bonus deposit for geothermal producing areas is expected to encourage economic growth in the local area,” said Gigih during the opening of the Geothermal Business Production Bonus Calculation Reconciliation Activity for the second quarter of 2024.

Gigih further added that the bonuses paid out in 2023 amounted to IDR 138 billion (approx. USD 8.9 million), and that an amount of IDR 29 billion (approx. USD 1.9 million) was determined for the first quarter of 2024.

The provision of production bonuses is one of the ways for geothermal projects in Indonesia to have a positive social impact, particularly for communities around the project sites. Geothermal operators have also made concerted efforts to improve the communities in other ways, as well as provide livelihood.

A recent notable example is the launch of a project at the Patuha site which reduces emissions and improves energy efficiency at a manure treatment facility. In late 2023, state-owned geothermal developer and operator PT Pertamina Geothermal Energy was recognized global ESG rating agency Sustainalytics for their Environment, Social, and Governance (ESG) practices.

Source: RM.ID