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News Releases 2013
Conclusion of Energy Sales Contract for Sarulla Geothermal IPP Project in
Indonesia
April 4, 2013
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”)
announced today that as of April 4, 2013, ITOCHU, Kyushu Electric Power Company Incorporated (headquartered in
Fukuoka City, Fukuoka; Michiaki Uriu, President; hereinafter “Kyushu Electric Power”), PT Medco Power Indonesia and
Ormat Technologies, Inc. in the United States have concluded a 30-year power purchase agreement (Energy Sales
Contract, hereinafter “ESC” ), through the investment subsidiaries owned by each of the companies and jointly
established operating company, Sarulla Operations Ltd (headquartered in the Cayman Islands) with Indonesia’s
state-owned electricity company, PT Perusahaan Listrik Negara (PLN) and PT Pertamina Geothermal Energy (PGE), a
subsidiary of PT Pertamina. The ESC includes the development of a geothermal resource concession owned by PGE in
Indonesia’s Sarulla region in North Sumatra, construction of a geothermal plant with a total capacity of approximately
330 MW and sales of generated power to PLN.
Owing 40% of the world’s potential geothermal resources, Indonesia holds the world’s largest amount of such
resources. The country positions geothermal energy as its strategic power source. Under the second 10,000 MW
acceleration program, which was formulated in 2010, approximately 40% (about 4,000 MW) of its total planned
capacity will be supplied by geothermal power generation. This independent power producer (IPP) project is the largest
single contract geothermal power project in the world, and is a core project of the second 10,000 MW acceleration
program. It is expected that the funds will be secured through project financing supported mainly by the Japan Bank for
International Cooperation and the Asian Development Bank. When the financial closure is completed, the construction
of the plant will begin aimed at gradual commencement of commercial operation from 2016.
Geothermal power generation is a technology for generating electricity using high-temperature and high-pressure
steam and hot water extracted from geothermal reservoirs deep underground. Geothermal power is a sustainable
energy resource, enabling almost indefinite use by reinjecting ground water properly back into the reservoir. It has less
impact on the environment since CO2 emissions during generation are very small. It is also capable of stable supply
throughout the year since it is not affected by weather, unlike other renewable energy resources. Accordingly, much
expectation is being given globally to utilization of geothermal energy as an important renewable energy source for the
future power generation.
ITOCHU will contribute to the Indonesian government’s policy of promoting geothermal energy through this project and
continue to be active in the power generation business promoting renewable energy resources such as geothermal
energy and wind power.
Outline of Sarulla Geothermal IPP
Location Sarulla region, North Sumatra province, Republic of
Indonesia
Power generation method Geothermal power generation
Capacity 330 MW
Investors ITOCHU Corporation 25%
Kyushu Electric Power 25%
PT Medco Power Indonesia 37.25%
Ormat Technologies, Inc. 12.75%
Conclusion of Energy Sales Contract for Sarulla Geothermal IPP Projec... http://www.itochu.co.jp/en/news/2013/130404.html
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Purchaser of produced
power
PT PLN
Contract period 30 years after commencement of commercial operation
Schedule 2014 Groundbreaking
2016 Phase 1 Commercial operation
2017 Phase 2 Commercial operation
2018 Phase 3 Commercial operation
Outline of foreign partners
PT Medco Power Indonesia
An Energy company owned by Indonesia’s largest private energy company PT. Medco Energi International Tbk, whose
business include oil & gas source development, LP gas production, drilling, coal mining, power generation, and O&M
service of power plants. It also holds several gas fired power plants in Indonesia.
Ormat Technologies, Inc.
Only company in the world that comprehensively develops, produces main equipment, construct, invest, and operate in
the geothermal generation field. It has supplied geothermal generation equipment of 1600 MW to 13 countries in the
past. It currently owns and operates 575 MW of geothermal power plant assets.
Project Site
Conclusion of Energy Sales Contract for Sarulla Geothermal IPP Projec... http://www.itochu.co.jp/en/news/2013/130404.html
2 of 2 10/06/2013 17:34
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