Project

Mandalika Special Economic Zone (SEZ) Solar PV Project

At a Glance

Start Date Q4 2016
Funding Source Core
Approved Budget USD 32 000 000
Status Active
Thematic Area
  • Sustainable Energy
Marcel J. Silvius

Country Representative, Indonesia

Project Rationale

Indonesia has a higher solar insolation compared to other countries. Indonesia’s fuel mix is dominated by fossil fuels. Deployment of solar PV is still limited, currently only 108 MW; an enormous solar PV potential remains untapped in the country.

Energy demand continues to grow fast, and new capacity has a significant share to fulfill the growing demand. The GoI is planning to develop 35 GW of additional power capacity between 2015 and 2019, and a further 45 GW by 2025. The National Energy Policy mandates renewable energy to account for at least 23% of the primary energy mix in 2025 and 31% in 2050, up from 4% in 2011.
Recognizing the declining trend of solar PV generation cost globally, the GoI plans to add 5 GW of solar PV as part of the national energy program by 2019. The GoI realizes that this is possible only with private sector participation in the sector. To enhance private sector participation and increase the investment flow in the sector, the GoI has introduced a new regulatory framework that would impact on-grid Solar PV deployment.

GGGI and PT SMI partnership has identified a project with the Indonesia Tourism Development Corporation (ITDC) which is designing a tourism Special Economic Zone (SEZ) called Mandalika on Lombok island. In phase one, ITDC estimates a power demand of 25 MW in the SEZ to serve around 1,500 rooms of large hotel chains such as Novotel, Pullman, Club Med, Accor, Royal Tulip and their associated utilities in the next 2-3 years. GGGI is supporting ITDC in supplying green and clean energy to this SEZ by facilitating development of a solar PV demonstration project.

Delivery Strategy

Project Outputs for 2017 – 18:

  • Green infrastructure projects in special economic zones (SEZ) are designed and demonstrated to be financially feasible

Project outcomes for 2017 – 2018:

  • Increased green investment is directed to focal sector – Energy

Planned Results

For ITDC, successful implementation of the project will set the basis for further development of 50 MW solar PV for the Mandalika SEZ for which the investment could scale up to USD 75 million (ITDC management’s vision).

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