Sign up Australia
Proactive Investors - Run By Investors For Investors

Panax Geothermal close to closing 2 Indonesian geothermal power purchase deals

Panax Geothermal close to closing 2 Indonesian geothermal power purchase deals

Panax Geothermal’s (ASX: PAX) Indonesian geothermal projects have made progress with finalisation of power purchase agreements for two projects expected soon.

PT PLN (Persero) and the country’s Ministries of Finance and Energy have confirmed that all negotiations relating to the terms and conditions of the agreements for the Sokorai and Dairi project are now final.

Final execution copies of these agreements are now being reviewed and prepared with execution expected to occur soon.

This will allow Panax and its joint venture partner PT Bakrie Power to finalise required project financing for the two projects.

Meanwhile, the scope of the Ngebel geothermal project in East Java is likely to be expanded as Panax and Bakrie have been granted the rights to develop the transmission-related aspects of the project.

This provides an opportunity for an increased electricity tariff to the JV and provides increased certainty over the timing and deliverability aspects of the project.

Progress has also been made towards finalisation of the power purchase agreement for Ngebel.

Indonesian geothermal projects

Sokoria is located in the Flores and will be capable of producing 30 megawatts of power, the same capacity as the Dairi Prime project in Northern Sumatra.

Panax is earning a 35% stake in Ngebel, which with expected power generation capacity of 165 megawatts, dwarves both Sokoria and Dairi Prime together.

The company is also carrying out exploration at the Jambi project in Central Sumatra, which has the potential to produce 80 megawatts of power.

Attractive investment location

Not only does Indonesia host some of the richest geothermal reservoirs in the world, it has ruled that geothermal power would be excluded from the change in Indonesian resource ownership laws that require foreign investors in coal, copper, gold and other resources to reduce their stakes to 49% 10 years after the original date of production.

As part of the Indonesian Government's carbon strategy, geothermal developers will also benefit from a guaranteed feed in tariff of US$97 per megawatt hour, along with carbon credits to geothermal energy generators. In addition, the government offers full protection to geothermal projects during exploration and construction.

The Indonesian Government has plans to increase geothermal production by 240% over the next four years to more than 4,000 megawatts.

 

Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.



Register here to be notified of future PAX Company articles
View full PAX profile

Panax Geothermal Timeline

Related Articles

Ceres Power fuel cells
September 07 2016
Fuel cell developer adds residential trials to growing list of projects
Fuell cell
July 06 2016
"Delivery of the small-scale system's basic engineering in such a tight timeframe is further validation of the decision to collaborate with our strategic partner plantIng," said CEO Adam Bond.
Tidal turbine being lowered into the sea, Pentland Firth, Scotland
November 16 2016
Atlantis is the majority stakeholder in MeyGen, in the Pentland Firth, where turbines are now starting to come online for power generation.

© Proactive Investors 2016

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.