Shearman & Sterling advised the Asian Development Bank (ADB) as sole lender on the $215 million financing of the Eastern Indonesia Renewable Energy Project. The project comprises a portfolio of one 72MW wind (Tolo Wind, phase 1) and four solar power plants aggregating to 42MW (Phase 2) on Sulawesi Island and Lombok Island. Phase 1 of the project achieved first drawdown in December 2017 and Phase 2 achieved first drawdown in May 2018.
This project is a landmark transaction for Indonesia and a significant step towards fulfilling the government’s commitment to reduce greenhouse gas emissions by prioritizing the use of renewable energy. The four solar projects were also the first Indonesian solar projects to achieve financial close on a limited recourse project finance basis. It is hoped that the project will help to establish a new blueprint for the country’s next generation of renewable energy projects.
With more than 532,600MW of potential solar power and 113,500MW of potential wind power in Indonesia, both sources are expected to play an increasingly significant role in the country’s overall new power generation capacity.