| Title | Exploring the Impact of Lender Procurement Guidelines on Geothermal Project Exploration Planning: Indonesia’s GREM Perspective |
|---|---|
| Authors | Aryani AMIR, Dorman PURBA, Desak Nyoman Inten APRIANI, Astri Indra MUSTIKA, Ferdino R. FADHILLAH |
| Year | 2024 |
| Conference | Stanford Geothermal Workshop |
| Keywords | geothermal, exploration, GREM, GEUDP, SMI, resource, risk, derisking, drilling, cost, procurement, budget, finance, fund, market, contractor, bidding, Indonesia |
| Abstract | Geothermal developers in Indonesia face a challenging financing landscape, particularly during the exploration phase of geothermal projects. The availability of financing products specifically designed for geothermal exploration remains limited. However, Geothermal Resource Risk Mitigation (GREM) financing emerges as the pioneering and currently the only available solution to help geothermal developers manage risks during this crucial phase. Understanding the lender's procurement guidelines becomes paramount in harnessing the potential benefits of GREM financing. This paper aims to provide geothermal developers in Indonesia with valuable insights into the importance of comprehending lender procurement guidelines in the context of limited financing options, highlighting the role of GREM as a risk management solution. By comprehending these guidelines, geothermal developers in Indonesia might gain insights into the specific requirements and procedures set by lenders, enabling them to align their project planning and implementation accordingly. This understanding enhances the developers' ability to navigate the procurement process effectively, increasing their chances of accessing GREM financing. Moreover, familiarity with the lender's procurement guidelines empowers developers to proactively address potential challenges and demonstrate compliance, ultimately improving their project's viability and reducing the risks associated with geothermal exploration. On the other hand, complying with lenders' procurement requirements can present challenges for geothermal project developers as borrowers. These challenges include navigating complex and rigorous procurement procedures, ensuring transparency and accountability throughout the process, meeting stringent eligibility criteria, and managing the administrative burdens associated with documentation and compliance. Additionally, developers may face difficulties in accessing the necessary resources and expertise to meet the specific procurement guidelines set by lenders. Finally, this paper aims to provide developers with a clear understanding of the benefits of following the lender procurement process and strategies for managing administrative burdens, ultimately yielding positive outcomes for the exploration project. |