Jurisdiction - Indonesia
Indonesia – Baker & McKenzie Advises on Landmark Geothermal Projects.

5 April, 2012



Baker & McKenzie's member firms in Singapore and Jakarta have advised the Sponsors in finalising the Power Purchase Agreement and Government Guarantee arrangements on the first two Indonesian geothermal projects to be finalised under the framework of Indonesia's 10,000MW Second Fast Track Program.
The Firm advised a consortium of PT Supreme Energy, International Power – GDF SUEZ and Sumitomo Corporation on its long term Power Purchase Agreement in respect of the Muara Laboh geothermal power project and the Rajabasa geothermal power project with PT PLN, the Indonesian state-owned electricity utility, and the guarantee provided by Indonesia's Ministry of Finance in respect of PT PLN's obligations under that Power Purchase Agreement. The development and construction of these two projects is expected to be financed by the Japan Bank for International Cooperation and other international financial institutions.
These two projects represent an important landmark in the development of geothermal power projects in Indonesia, as they are the first two projects to be signed, with accompanying Government guarantees, under the 10,000MW Second Fast Track Program for renewable energy projects initiated by the Indonesian Government.
The Firm was involved in the development of the Power Purchase Agreement and Government Guarantee documentation for these projects. This documentation is now expected to become the model adopted by PT PLN and the Ministry of Finance for the dozens of other geothermal projects listed on the Indonesian's Government's ambitious 10,000MW Second Fast Track Program, which is very heavily dependent on geothermal power generation.
The team was led by Hadiputranto, Hadinoto & Partners's Jakarta-based Foreign Legal Consultant, Luke Devine, and by Baker & McKenzie.Wong & Leow's Singapore-based Principal, Chew Chin, who were both supported by associate Kirana Sastrawijaya in Jakarta. The deal adds to the Firm’s market leading expertise and experience in the Energy, Mining & Infrastructure sectors in Indonesia, and in particular highlights the Firm's ability to provide a seamless international counsel and local counsel service to clients who are developing energy and infrastructure projects in Indonesia.
Commenting on the deal, Luke Devine said, “The successful signing of the PPAs and Government Guarantees for these two projects is a very significant step forward in the development of Indonesia's abundant geothermal reserves. The development by PLN and the Indonesian Government of a model bankable form of Power Purchase Agreement and Government Guarantee should result in an accelerated roll-out of the many other geothermal projects which are slated for development as part of the Second Fast Track Program, and the Firm is very proud of our involvement in helping to shape those documents.”
For further information, please contact:
Josephine Wagner Poedenphant, Baker & McKenzie


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