ITOCHU Announces Commencement of Commercial Operation of Final Unit in World’s Largest Geothermal IPP Project in Sarulla, Indonesia

May 9, 2018

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today that on May 4, the commercial operation of the third unit in the Sarulla Geothermal IPP Project (hereinafter “the Project”) commenced. ITOCHU is participating in this geothermal power plant project, which is the largest of its type in the world.

Since the bidding for the concession of the Project conducted by Indonesia’s state-owned electric power company (hereinafter “PLN”) in 2004, as well as the conclusion of the energy sales contract with PLN in 2007, ITOCHU has been involved in the development of the Project with other shareholding partners for a long time. With the commencement of the commercial operation of the third unit, the entire power plant as planned by the Project has commenced commercial operation with a total capacity of approximately 330MW, which is equivalent to the power consumption of approximately 2.1 million households in Indonesia.
This independent power producer (IPP) project is the largest single contract geothermal power project in the world. This Project marks the first time that the Japan Bank for International Cooperation and the Asian Development Bank have provided a project finance-based loan together to a greenfield geothermal project. The total loan amount is approximately USD 1,170 million, which is an unprecedented size for a project finance-based loan to a geothermal IPP.

Indonesia holds the world’s largest amount of geothermal resources, and the country positions geothermal energy as its strategic power source. ITOCHU is exploring the possibility of the expansion of this Project in the future, as it is expected that further geothermal resources for power generation could be developed in the Sarulla area.

Including this project, the total overseas and domestic renewable energy-based power generating capacity handled by ITOCHU has now reached 2,000MW. Through this project, ITOCHU will provide a stable supply of electric power in Indonesia while actively promoting power generation projects that utilize low-emission, renewable energy sources such as geothermal and wind power.

The project company of this Project has been actively conducting CSR activities in the area surrounding the Project site. Through this Project, ITOCHU will continuously harmonize its business with local communities and contribute to building sustainable societies.

Second and Third Units of Sarulla Geothermal IPP Project

CSR activity conducted by the project company with local communities (free English course for elementary and junior high school students)

Project Site

Outline of the Sarulla Geothermal IPP Project

Planned Construction Site Sarulla region, North Sumatra province, Indonesia
(Approximately 350 km south of Medan, Indonesia’s fourth-largest city)
Project Details Integrated development from geothermal resource development to power generation Selling of electric power to PLN for 30 years
Output Approximately 330 MW (three units)
Project Company Sarulla Operations Ltd
(Chief Executive: Shinichi Aburaya (seconded from ITOCHU))
Investors Kyushu Electric Power                       25%
ITOCHU Corporation                        25%
PT Medco Power Indonesia              18.9975%
INPEX Corporation                     18.2525% *1
Ormat Technologies, Inc.                   12.75%
  • *1In 2015, INPEX Corporation acquired 49% of the shares of a Medco subsidiary through a wholly-owned subsidiary and joined the Project.

History of the Sarulla Geothermal IPP Project

2004 Bidding conducted by PLN
2007 Award of concession of the Project
2014 Financial Close
March 2017 Commercial operation of first unit
October 2017 Commercial operation of second unit