Liga Asuransi – Amidst the rapid transition to clean energy, Indonesia is refocusing its attention on a once-forgotten geothermal project: the Mataloko Geothermal Power Plant in Ngada Regency, East Nusa Tenggara (NTT). This project is not a new idea—construction began in the early 2000s with the hope of becoming a green energy icon in the eastern part of the archipelago. However, after numerous drilling efforts and basic infrastructure development, the Mataloko Geothermal Power Plant stalled. The infrastructure is partially in place, wells have been drilled, but the electricity generated is almost nil.
For nearly 20 years, the Mataloko Geothermal Power Plant has been “stalled” — a reminder that geothermal projects are highly complex if the technical, social, regulatory, and funding aspects are not managed properly.
Now, the project is back in the national spotlight. The government, PLN, and the Ministry of Energy and Mineral Resources plan to revive the Mataloko Geothermal Power Plant. The project is currently in the design and documentation phase—a crucial phase that will determine whether the reconstruction will proceed smoothly or face further delays.
Why is this project being revived now? What past obstacles must be addressed? And what strategic steps need to be taken to ensure the project’s full operation?
This article will thoroughly discuss the history of the Mataloko Geothermal Power Plant, its current state, and the technical, social, regulatory, and financial aspects that need to be considered to ensure the revival of this project is truly realized.
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History and Chronology of the Mataloko Geothermal Power Plant Project
The Mataloko Geothermal Power Plant (PLTP Mataloko) is one of the earliest geothermal projects developed in eastern Indonesia. Located in Mataloko Village, Golewa District, Ngada Regency, East Nusa Tenggara, the site was chosen for its significant geothermal potential. Geologically, the Flores region is known for its array of active volcanoes and rich geothermal systems, making it an ideal candidate for geothermal energy development.
1. Early Development (2000–2004): Great Hopes for Green Energy
The Mataloko project was first initiated by PT PLN (Persero) in the early 2000s. During this period, PLN drilled geothermal wells and constructed basic generating facilities. The initial planned capacity was set at around 12 MW, which was projected to be sufficient to meet the electricity needs of most of the Ngada region and its surroundings.
This initial step was in line with the government’s policy at that time, which wanted to exploit Indonesia’s geothermal potential — a country that has the second largest geothermal resources in the world after the United States.
However, despite initial high spirits, the project faced various structural obstacles.
2. Stopped in the Middle of the Road: Infrastructure Without a Network
By the mid-2000s, the development process began to stall. The primary cause was the unpreparedness of the electricity transmission network. The power plant was built first, but the transmission and distribution lines to consumers were not yet ready. As a result, even though some of the physical infrastructure was already in place and geothermal wells had been drilled, the electricity generated could not be optimally distributed.
Furthermore, technical difficulties with well drilling have resulted in unstable geothermal steam production. Several reports indicate that one of the wells experienced pressures that were below initial projections.
3. Social and Land Issues: The Obstructing Conflicts
In addition to technical issues, the project also faces social challenges. The land surrounding the project is customary land, and the land acquisition process was not conducted with an adequate social approach. As a result, resistance and protests emerged from some local communities.
Unclear compensation issues and a lack of communication between the project and the surrounding community have made the project increasingly difficult to continue. In some cases, project facilities have even been damaged due to community protests.
4. Stalled for Two Decades (2005–2023): From Strategic Project to “Monument”
After facing numerous obstacles, the Mataloko Geothermal Power Plant project finally came to a complete halt. For nearly 20 years, the project site had become a sort of “abandoned monument,” with abandoned buildings and obsolete equipment. Some local residents even considered it a local tourist attraction because of its uniqueness—a massive project that stood majestically but never functioned.
During this period, the government prioritized geothermal project development in other regions deemed more infrastructure-ready, such as West Java and Sumatra. As a result, Mataloko fell off the priority list.
5. Revival (2024–Present): Entering the Design & Documentation Phase
It wasn’t until 2024, with the government’s increased focus on the energy transition and the 2060 Net Zero Emissions target, that the Mataloko Geothermal Power Plant project was reconsidered. PLN and the Ministry of Energy and Mineral Resources began reviewing the potential and condition of the existing infrastructure.
The project is currently in the design and documentation phase, which involves the technical planning and preparation of project documents that will serve as the foundation for physical implementation. This phase includes:
- Evaluation of the condition of existing wells and old equipment
- Re-planning of generation and transmission systems
- Re-arrangement of work plans and project financing
- Identification of technical, social and environmental risks
- Coordination with local government and local communities
If this phase goes smoothly, construction is projected to begin within the next few years. The government aims for the Mataloko Geothermal Power Plant to be fully operational by the end of this decade, as part of efforts to strengthen the electricity supply in eastern Indonesia.
This historical section provides an important foundation for entering Part III: Flores’ Geothermal Potential & Strategic Reasons for Reviving the Project.
Shall I move on to that part now? (This is the part that will reinforce “why now is the right time”).
II. Geothermal Energy Potential in NTT and Its Significance
East Nusa Tenggara (NTT) has long been known for its natural resources—from scenic tourist attractions to untapped geothermal reserves. According to data from the Ministry of Energy and Mineral Resources (ESDM), the NTT region has approximately 437 MW of geothermal reserves, spread across several locations, including Mataloko (Ngada), Ulumbu (Manggarai), Atadei (Lembata), and several other potential locations.
1. Huge Potential That Is Still ‘Sleeping’
To date, geothermal utilization in NTT has only been a small portion of its total potential. The Ulumbu Geothermal Power Plant, with an installed capacity of 12.5 MW, is the only one fully operational, with the rest still in the exploration and study stages. Yet, if the full 437 MW of geothermal potential could be utilized, NTT has the potential to become a clean energy hub in eastern Indonesia.
“Geothermal is a baseload energy source, capable of operating 24/7 regardless of the weather. This is suitable for regions looking to reduce their dependence on diesel,” said an official from the Geothermal Directorate of Energy and Mineral Resources (Katadata, 2023).
2. Important for the Reliability of the NTT Electricity System
NTT’s electrification rate has been relatively low compared to other provinces. Many regions still rely on expensive and environmentally unfriendly diesel-powered power plants (PLTD). PLN data from 2023 shows that approximately 60% of NTT’s electricity supply still comes from diesel, with the basic cost of electricity supply (BPP) reaching Rp 2,000–2,500/kWh—far above the national average.
With the operation of the Mataloko Geothermal Power Plant and the development of other potential, PLN can:
- Reducing the cost of electricity supply in the eastern region
- Improving the reliability of the electrical system
- Supporting the 2060 net zero emission target
3. National Significance
The revival of the Mataloko Geothermal Power Plant is not just a local project. It is part of the national energy transition strategy. The government is targeting a 23% share of new and renewable energy (NRE) by 2025, and geothermal energy plays a crucial role due to its stability and scalability. Indonesia itself has geothermal potential of approximately 24 GW—the second largest in the world after the United States. However, only around 8–9% of this has been utilized.
With NTT as one of the eastern focus areas, the success of the Mataloko project could become a model for accelerating geothermal development in non-Java regions, which have often lagged behind in terms of infrastructure.
Challenges and Preparations for the Development of the Mataloko Geothermal Power Plant
Although plans for the Mataloko Geothermal Power Plant (PLTP) are reviving, the project cannot be started immediately. After being abandoned for two decades, many aspects must be thoroughly re-prepared to prevent further delays. Here are some crucial points:
1. Infrastructure Audit and Technical Readiness
The Mataloko project began in the early 2000s, including drilling geothermal wells, building the foundations for the geothermal power plant, and constructing part of the steam pipeline. However, due to prolonged disuse, much of the infrastructure is now damaged or does not meet current standards.
The Ministry of Energy and Mineral Resources and PLN are currently carrying out:
- Design and Documentation Stage (design and documentation stage), including technical audits of existing wells and surface systems.
- Retesting of steam discharge and reservoir pressure to ensure power capacity is still adequate.
- Adapting the geothermal power plant design to the latest technology, to make it more efficient and easier to maintain in the long term.
2. Funding and Financing Schemes
One of the reasons the Mataloko project stalled was the lack of a clear financing scheme. Currently, the government, through PT PLN Indonesia Power and the Directorate General of New, Renewable Energy and Energy Conservation (DGRE), is designing a new funding structure, potentially involving:
- APBN funds for the initial stage,
- Scheme private partnership (PPP) for the construction of commercial geothermal power plants,
- International financial institution support for clean energy projects.
A robust financing scheme will ensure the project can proceed without complete dependence on subsidies, and remain economical for both PLN and consumers.
3. Licensing, Land, and Social Support
Even though the Mataloko area is technically ready, the licensing and social aspects remain very important:
- Restructuring of geothermal permits in accordance with the latest regulations (Geothermal Law and derivative Government Regulations).
- Coordination with local government and local communities to ensure there are no land disputes.
- Involving the local community in the public consultation process, so that development receives strong social support.
Geothermal projects in Indonesia often face social challenges. Therefore, communication and community compensation are crucial in the early stages of development.
4. Operational and Insurance Risk Mitigation
Geothermal power plant projects must also consider various construction, technical, and environmental risks. This is where energy project insurance plays a vital role:
- Construction insurance (CAR/EAR) to protect the project from damage during construction.
- All Risks Property Insurance for protection of geothermal power plant assets during operation.
- Liability insurance to protect against potential third party claims (e.g. environmental damage or social impact).
Insurance and Risk Management Aspects of the Mataloko Geothermal Power Plant Project
The construction of the Mataloko Geothermal Power Plant, after 20 years of stalling, certainly presents more complex risks than a typical new project. To ensure smooth construction and operation, planning an insurance program from the outset is crucial. The following are the main areas of coverage that need to be prepared:
1. Construction / Erection All Risks (CAR/EAR) Insurance
This type of insurance is mandatory for energy infrastructure projects, including geothermal power plants.
Its coverage protects:
- Physical damage to construction work due to accidents, natural disasters, worker errors, or contractor negligence.
- Damage to equipment during the installation process (e.g. turbines, generators, steam pipes, or control systems).
- Cost of clearing debris or debris removal.
Why it’s important in Mataloko:
Because parts of the existing structure may need to be rehabilitated or demolished, the risk of damage during redevelopment is higher than in a typical greenfield project.
2. Third Party Liability (TPL) Insurance
Provides protection against claims from third parties for:
- Bodily injury or death,
- Damage to property belonging to the public or other parties,
- Social/environmental disruption due to construction activities.
In Mataloko, the project is located near local community settlements and customary lands. Therefore, potential social and environmental claims must be anticipated from the outset.
3. Delay in Start Up (DSU) / Advance Loss of Profit (ALOP)
The DSU policy covers financial losses due to delays in project operations caused by risks covered by the CAR/EAR policy (e.g., disasters or heavy equipment damage).
For example: if a turbine is damaged during installation and causes the project to be delayed by 6 months, the DSU policy can replace the potential lost electricity revenue.
This is relevant for Mataloko, as the project is part of PLN’s and the government’s strategic plans. Any delays will directly impact electrification targets and the renewable energy mix.
4. Operational Phase – Property All Risks (PAR) & Machinery Breakdown (MB)
Once the geothermal power plant is operational, the next stage is asset protection from:
- Fire, explosion, natural disaster, electrical system failure,
- Damage to turbine engines, steam pipes and other vital components due to accidents or sudden wear and tear.
This is crucial in Mataloko, given the geothermal power plant’s location in an earthquake-prone area and unique geographic conditions. PAR & MB will ensure the long-term security of the investment.
5. Environmental Liability & Business Interruption
Geothermal projects have potential environmental impacts, such as geothermal fluid leaks or ground disturbances. An Environmental Liability policy can protect developers from often costly environmental claims.
Business Interruption Insurance protects against loss of income in the event of an unexpected operational disruption that causes the geothermal power plant to temporarily stop.
The Role of Insurance Brokers
Managing such a comprehensive insurance package requires strategic planning that is in sync with:
- Project schedule (engineering timeline),
- Funding structure and lender requirements,
- EPC and subcontractor contract standards,
- Geothermal and environmental regulations.
This is where L&G Insurance Broker can play a role:
- Helping to plan insurance program according to the project risk profile,
- Negotiate the best premiums and clauses with national and international insurance,
- Claims assistance in the event of an incident during construction or operation,
- Be a strategic liaison between developers, contractors and insurers.
A project as large as the Mataloko Geothermal Power Plant is not enough to just buy a policy — what is needed is risk management strategy comprehensively, so that investments run without financial obstacles.
Conclusion and Recommendations
The revival of the Mataloko Geothermal Power Plant (PLTP) project after 20 years of stagnation represents a significant milestone for clean energy development in Indonesia. With East Nusa Tenggara’s geothermal potential reaching hundreds of megawatts, the project’s success will have significant impacts—from increasing energy independence in the eastern region, lowering electricity costs, to making a significant contribution to the national energy transition target.
However, this enormous potential also comes with significant challenges: aging infrastructure, funding, social aspects, and construction and operational risks. Therefore, thorough planning and robust risk protection are key to ensuring this project’s success on target.
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