Ratings of SMI affirmed at idAA+/stable
The government continues to strive for the realization of environmentally friendly sustainable development. Geothermal is one of the renewable energy potentials, which is targeted by the government to reach 23% of the NRE mix by 2025, in accordance with the General National Energy Plan contained in Presidential Regulation No. 22 of 2017. The huge potential of Indonesia's energy availability comes from heat. earth, but only 8% is used as an energy source. In fact, geothermal energy can reduce dependence on coal energy sources which have a negative impact on the environment. For information, Indonesia's geothermal energy development target in 2025 is 7,241.5 MW, with the utilization of the current total installed capacity of 2,175 MW. This makes Indonesia ranked second after the United States as the world's largest producer of geothermal energy. The data is accessed through the article page of the Directorate General of New Renewable Energy and Energy Conservation, Ministry of Energy and Mineral Resources (“ESDM”), https://ebtke.esdm.go.id/.
Talking about the use of geothermal energy, of course this requires financing projects that are not cheap which have a lot of business risks. This makes the Government of Indonesia must collaborate with multilateral partners to support it. The World Bank (The World Bank) is one of the partners of the Government of Indonesia who has an interest in exploring geothermal energy.
The Wae Sano Geothermal site exploration drilling program is one of the Geothermal Energy Upstream Development Project activities planned by the Government. The exploration location for this geothermal site will be located in Wae Sano Village, Sano Nggoang District, West Mangarai Regency, East Nusa Tenggara Province. This project is initiated and owned by the Ministry of Energy and Mineral Resources, where funding is facilitated by the Ministry of Finance (“MoF”) and the World Bank by assigning PT SMI to manage PISP funds. For information, PISP stands for Geothermal Sector Infrastructure Financing. The legal basis for the geothermal project financed by PT SMI is the Minister of Finance Regulation no. 62 of 2017 concerning Management of Geothermal Sector Infrastructure Financing Funds (PISP) at PT Sarana Multi Infrastruktur (Persero). Meanwhile, PT GDE as a Geothermal State-Owned Enterprise (“BUMN”) in Indonesia, acts as an implementing agency.
In strategic terms, the Ministry of Energy and Mineral Resources and the Ministry of Finance establish a Joint Committee for policy formulation and strategic decision making. The Joint Committee, the World Bank, and PT SMI jointly supervise the geothermal exploration activities carried out by PT GDE.
In fact, the government has also calculated the long-term benefits from the social and economic aspects that can be felt by the community if this project is implemented. There are at least four main points that can be achieved if this project is implemented, namely:
1) The availability of electricity, this will improve the quality of people's lives in aspects including health services, educational services, ease of communication and processing of raw materials.
2) Potential for tourism development. Another impact of the availability of geothermal energy is the availability of clean energy which is in line with the development of premium tourist destinations in Labuan Bajo. In addition, there is a hot tub bath. If managed properly, which collaborates between the Regional Government (Pemda) and local communities, it has the potential to increase Regional Original Income (PAD) because it can attract tourists.
3) Potential development of crop cultivation/agriculture and handicrafts, for example the manufacture of dye weaving crafts, processing of candlenut waste, processing and marketing of cashew nuts and non-timber forest products that can improve the local economy. The potential development of the above program has been carried out by PT SMI through the Desa Bakti untuk Negeri ("DbuN") program which is one of the company's Partnership and Community Development Programs ("PKBL") which was initiated with the Environmental Evaluation and Consulting Services Division at PT SMI. .
4) Potential access to health, education and others is available due to open access to other infrastructure to support people's lives.
5) Potential diversification of available employment opportunities because Geothermal Power Plants require skilled and skilled workers to operate, maintain, and maintain high-tech Power Plants.
Some of these positive aspects did not fully get the approval of the residents. The rejection from several residents made PT GDE as an executor in the field also participate in compiling the Implementation of the Environmental Social and Management Framework ("ESMF") through the preparation and implementation of protection documents such as Environmental & Social Impact Analysis ("ESIA"), Land Acquisition and Resettlement Plan (“LARAP”), and Environmental Social Management Plan (“ESMP”). These documents have been prepared based on input from the residents of Dasak, Nunang and Lempe villages affected by the dam and have been published on the PT SMI, PT GDE and World Bank websites.
In each of its business activities, PT SMI always applies Environmental and Social Safeguards (“ESS”) standards. Especially in this project which received funding from the World Bank, the application of the ESS standard became mandatory for PT GDE to implement.
As an executor in the field, PT GDE must have applied the ESS principles by taking into account the project site location for geothermal exploration activities. It is certain that the location of the exploration point has no settlements above it and will not interfere with the existence of sites that are sacred to the Nunang community, such as comangs, tombs, places of offerings, churches and others. The selection of the project site has also been in consultation with traditional elders.
In this project, for landowners whose land is leased, after the completion of the loan period, the land will be able to be used as before. Of course, with the various things above, it can be concluded that the interests of the affected communities are really being considered.
Not only that, even at every stage of decision-making, several community groups are always involved, for example, religious leaders in the Ruteng Diocese, community groups who agree and reject. Religious leaders are involved in making decisions about the social management of the Wae Sano community. Meanwhile, with people who agree and reject, hearings are always held to jointly provide education on the benefits of geothermal projects. The West Manggarai local government is also always involved in policy alignment between the center and the regions. Until now, PT GDE continues to coordinate with various elements of society to update social and environmental data which will be republished later.
Elsewhere, geothermal projects have proven to be profitable, for example in the Dieng and Patuha Geothermal Working Areas (“WKP”) managed by PT GDE. PT GDE has proven to be able to coexist with community plantation activities, such as potato plantations in Dieng and tea plantations in Patuha. Even side by side with local tourism activities, such as hot springs in Dieng and the Kawah Putih tourist destination in Ciwidey.
In addition, PT GDE always makes efforts to conserve biodiversity, such as reforestation in critical land areas, cultivation of endemic plants, and socialization related to the prohibition of hunting. The presence of PT GDE in Dieng and Patuha also improves the quality of life of the surrounding community through its Corporate Social Responsibility program, through the following programs: 1) “GDE Cares” by providing counseling and scholarships); 2) “GDE Maju” through the road construction/repair program, electricity enters the village; and 3) “GDE Pintar” through local Micro, Small and Medium Enterprises (“MSME”) mentoring programs, geotourism programs, and comparative studies. In implementing these various programs, PT GDE continues to synchronize programs with the local government in order to provide optimal impact for the community and local development.
In line with PT GDE, although PT SMI does not play a direct role in the field, PT SMI has also completed the implementation of PKBL DbuN in 2019 whose benefits are aimed at local communities in the form of basic infrastructure development in the Wae Sano area. In the implementation of this PKBL, PT SMI also collaborates with the Dian Desa Foundation to map basic infrastructure which is a priority for the community's main needs.
It was identified that there are three main needs, namely revitalizing the provision of clean water systems, building schools, and developing community economic activities. There are several clean water systems built in the Wae Sano area, namely the Wae Lenang, Wae Longa, Wae Kuta, and Wae Kuwek systems. In addition, there is also a clean water system for churches, parishes, schools, and health centers. The entire clean water system has been functioning properly and has been used by the community since 2019, even in building it, the community gotong royong actively provided clean water development.
Not only that, the DBuN program also targets educational needs, namely the construction of three classrooms at an Elementary School (“SD”) in Wae Sano. It is recognized by the community that the residents of Wae Sano have experienced a lack of school facilities for many years. For this reason, based on the approval of support from PT SMI, three classrooms have been built for SD in Wae Sano. The classrooms that have been built can finally be used by students and teachers for teaching and learning facilities in mid-2019.
From an economic perspective, the DBuN Program also supports the economic development of the Wae Sano community by providing training to local residents in the form of cloth craft processing, cashew nut processing, honey processing, and candlenut processing.
Of course, some of the steps above need to be taken into account by community leaders who are still refusing to do so. The Indonesian government has proven to be very careful in implementing the development of an infrastructure project, this is of course in order to create a sense of social justice for all Indonesian people as the embodiment of the 5th principle of Pancasila.
About PT Sarana Multi Infrastruktur (Persero)
PT Sarana Multi Infrastruktur (Persero) (“PT SMI”) which was established on February 26, 2009 is a State-Owned Enterprise under the coordination of the Ministry of Finance in the form of a Non-Bank Financial Institution (LKBB). PT SMI plays a role and has a mandate as a catalyst for accelerating national development.
PT SMI has various functions and unique products/features to support the acceleration of infrastructure development which not only functions as infrastructure financing but also as an enabler through the implementation of the Government and Business Entity Cooperation (PPP) scheme which includes various financial institutions, both private and multilateral. PT SMI actively supports the implementation of PPPs and encourages the acceleration of infrastructure development in the regions through regional loan products.
PT SMI has three business pillars, namely (1) Financing and Investment, namely financing for infrastructure projects, (2) Consulting Services, namely solutions to the needs of professionals and experts in infrastructure and (3) Project Development, which is helping the Person in Charge of Cooperation Projects. (PJPK) to prepare infrastructure projects.
Head of Corporate Secretary
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