Masdar JV starts construction on Indonesia’s floating power plant

Masdar, one of the world’s leading renewable energy companies; and PT PJBI, a subsidiary of Indonesia’s state-owned electricity company PT PLN, announced on Tuesday that financial close has been achieved on the Cirata Floating Photovoltaic Power Plant project and construction work has begun.

Financing for the project - Indonesia’s first floating solar power plant - was arranged through Sumitomo Mitsui Banking Corporation, Societe Generale, and Standard Chartered Bank, said a Masdar press release.

The 145-megawatt (ac) plant is being developed by PT. Pembangkitan Jawa Bali Masdar Solar Energi (PMSE), a joint venture (JV) between Masdar and PT PJBI, and is expected to begin commercial operation in the fourth quarter of 2022.

Bahlil Lahadalia, Minister of Investment of Indonesia and Chairman of the Indonesia Investment Coordinating Board, said, “The Ministry of Investment fully supports the investment realisation of the Cirata Floating Solar Project by PT. PJBI and Masdar. This is a flagship project of the UAE’s investment in Indonesia, and most importantly, it is in line with the Indonesian Government target in renewable energy mix of 23 per cent by 2025.”

He stressed that, “This project represents the UAE’s first investment in Indonesia’s renewable energy sector, and we look forward to furthering collaboration between our countries, as we leverage our natural resources to build a more sustainable future.”

Abdulla Salem Al Dhaheri, UAE Ambassador to Indonesia and the ASEAN region, said, “Reaching this historic milestone demonstrates the strength of the relationship between the UAE and Indonesia. The UAE is committed to promoting and investing in clean energy projects around the world and taking positive action on climate change. We stand together with Indonesia on driving sustainable development and we will continue to support the nation’s clean energy transition.”

Set to be the largest of its kind in Southeast Asia and one of the largest in the world, the plant is being built on the Cirata reservoir in the West Java Province. Once completed, it will provide enough electricity to power 50,000 homes, and will offset 214,000 tonnes of carbon dioxide emissions, and contribute to the creation of up to 800 jobs.

Throughout the development of the project, Masdar has conducted a series of social initiatives, raising awareness on sustainability issues and strengthening local community engagement.

Mohamed Jameel Al Ramahi, CEO of Masdar, commented, “This achievement would not have been possible without the constant support of the Government of Indonesia, our lenders, and our strategic partnership with PJBI and PT PLN, who have been with us on every step of our journey. The designation of this project as a National Strategic Project has been invaluable in enabling us to make such significant progress and demonstrates that the government recognises the economic and social benefits the Cirata project will bring to the local community and all of Indonesia.”

Amir Faisal of PJBI, said, “This floating power project is a first for Indonesia, and is also a significant step in PJBI’s renewable energy journey. We see tremendous potential for similar projects in Indonesia and we look forward to continuing our fruitful collaboration with Masdar to work on more renewable energy projects and help our nation achieve its clean energy objectives.”

Indonesia, the world’s largest archipelago nation, is targeting 23 per cent of its energy mix coming from renewables by 2025 under its Electricity Infrastructure Acceleration Programme. The government also recently announced that it aims to increase the proportion of renewable power in its 2021-2030 national electricity plan to at least 48 per cent, from 30 per cent in its previous plan, said the press release.

Masdar announced recently that it is expanding its footprint in the Republic of Uzbekistan, with the signing of agreements to develop two photovoltaic (PV) power projects in the country for a combined capacity of 440 megawatts.

Sardor Umurzakov, Deputy Prime Minister and Minister of Investments and Foreign Trade of Uzbekistan, signed the Investment Agreements for both projects with Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, in Tashkent.

The Power Purchase Agreements were signed by Sobirjon Artikov, First Deputy Chairman of the Board of JSC National Electric Grid of Uzbekistan, and Masdar’s Al Ramahi.

“The Government of Uzbekistan opened up the power sector to private investments by implementing public-private partnership projects that can attract foreign capital efficiently and transparently,” Umurzakov said.

Under the agreements, Masdar will develop, build and operate the plants, which will each have a capacity of 220 MW, on a public-private partnership basis. Commercial operation of the projects, which will be located in the Samarkand and Jizzakh regions of Uzbekistan, is expected to start in the first quarter of 2023.

The International Finance Corporation acted as lead transaction advisor, assisting the Government of Uzbekistan to structure the projects and organise the selection of the winning bidder through an open tender process.

“The Ministry of Energy has been working closely with the IFC to help Uzbekistan reach its goal of 25 per cent of energy consumption deriving from renewable sources by 2030,” said Alisher Sultanov, Minister of Energy of Uzbekistan. “These projects are key components in our ambitious strategy to develop environmentally friendly renewable sources of energy to meet our growing electricity demand.”

“These new projects are a further demonstration of Masdar’s commitment to supporting Uzbekistan in achieving its clean energy and climate change objectives,” Al Ramahi said.

He added, “Uzbekistan is a key strategic investment destination for Masdar as the Government continues to take a leadership role in clean energy projects in the region, and accelerate the nation’s energy transition. Masdar is proud to support Uzbekistan’s decarbonisation strategy through our strong portfolio of wind and solar projects in the country.”

In May, Uzbekistan’s Ministry of Energy announced that Masdar was selected for both projects based on a competitive tender. Masdar has also won the tender for another solar project in Uzbekistan, for a 457 MW photovoltaic solar power plant in the Sherabad district of the Surkhandarya province.

The new project wins add to Masdar’s existing projects in Uzbekistan, with the company last year announcing financial close on the 100 MW Nur Navoi Solar Project – Uzbekistan’s first successfully financed independent power producer (IPP) solar project.