Australian companies announce takeover offer; IFC and Germany each offer geothermal support to Indonesia; Japan’s National Park survey; Philippines’ Tiwi-Makban drilling talks

Two geothermal companies in Australia announce a takeover offer. In Indonesia, IFC and Germany are both offering new funding. In Japan, Marubeni begins the first geothermal survey in a national park. In the Philippines, Aboitiz and Philippine Geothermal discuss drilling in plans to upgrade the Tiwi-Makban facilities.


Australia: Two Geothermal Players Announce Takeover Offer
Indonesia: IFC to Offer Geothermal Investments; German Funds Secure Geothermal Growth
Japan: Marubeni Begins Geothermal Survey in National Park
The Philippines: Aboitiz and Philippine Geothermal in Tiwi-Makban Drilling Talks

Australia: Two Geothermal Players Announce Takeover Offer
In a joint announcement, the two geothermal players describe how Milton, Queensland-based Geodynamics Limited’s conditional off market takeover offer would mean full acquisition of 100% of KUTh Energy Limited, based in Sydney, New South Wales. According to the release (Geodynamics.com.au, PDF) Geodynamics is offering one (1) Geodynamics share for every five and a half (5.5) KUTh shares, valuing KUTh at 2.0 cents per share based on the 30-day VWAP (volume weighted average price) of Geodynamics’ shares – a 31.6% premium to the corresponding 30-day VWAP of KUTh shares. KUTh, which Geodynamics sees as a strong strategic and commercial fit thanks to its geothermal portfolio in the Pacific Islands, will become a subsidiary.

Indonesia: IFC to Offer Geothermal Investments; German Funds Secure Geothermal Growth
Development of Indonesia’s enormous geothermal potential, though seemingly subject to land acquisition and permit issues, has been growing in terms of developing projects in some stage of development since efforts for and following the country’s 2003 Geothermal Laws. This week, new funding announcements added to the positive flow of market growth.

The International Finance Corporation (IFC) plans to invest between US$500 million and $1 billion in Indonesia’s private sector in the current fiscal year, which began in July. One of the targets of the investment is the geothermal sector. “We’re looking at 10-12 potential projects this fiscal year in which we will focus on infrastructure and agribusiness as well as geothermal,” the IFC country manager Sarvesh Suri told press. The IFC, which is a member of the World Bank group, will provide investments as well as loans to Indonesian companies (Thejakartapost.com).

Within the same week comes the announcement of an agreement between the Indonesian and German governments that is also focused on developing geothermal projects in Indonesia. A financial program worth US$534 million, through grants and soft loans, has already begun identifying geothermal projects starting with the first in Seulawah Agam, Aceh province. Last year German Chancellor Angela Merkel and Indonesia’s President Susilo Bambang Yudhoyono agreed to collaborate in increasing Indonesia’s share of renewable energies to 25% by 2015 (Asian-power.com).

Other recent Indonesian geothermal funding announcements include a grant of 65 million yen ($667,000) worth of equipment from Japan International Cooperation Agency (Geoenergist.wordpress.com) and a financing agreement for Raya Group’s three geothermal projects in Indonesia (Geoenergist.wordpress.com).

Japan: Marubeni Begins Geothermal Survey in National Park
A geothermal survey of Daisetsuzan National Park by Tokyo-based company Marubeni is underway on the northern island of Hokkaido and will continue through February (Bloomberg.com). Last year the Japanese Energy and Environment Council deregulated legislation that had previously outlawed geothermal development in their national parks in an effort to increase geothermal development. For more on Japan’s geothermal market see GEA’s 2013 Geothermal Power: International Market Overview (PDF).

The Philippines: Aboitiz and Philippine Geothermal in Tiwi-Makban Drilling Talks
Aboitiz Power Corp. and Philippine Geothermal Production Co. Inc. are in talks about the establishment of a drilling program to increase steam production of the Tiwi-Makban geothermal facilities. The two must also decide how to split the total drilling cost which is estimated at between $6 to $10 million. Michael Pierce, chief operating officer of Aboitiz Power subsidiary AP Renewables Inc. was quoted, “It’s a conceptual discussion on what the make up well, drilling program will look like. We’re trying to close the gap and come to some agreement. Hopefully, we can resolve it by end of the year. There are quite a few steps before we start drilling wells.” Aboitiz Power president Erramon Aboitiz added, “We hope to work with PGPC to bring the level of steam to higher levels. If we don’t drill any new make up wells, then that production will go down.” Philstar.com

GEA’s September 5 news (Geoenergist.wordpress.com) noted: Aboitiz Group’s subsidiary AP Renewables Inc., which acquired the Tiwi-Makban geothermal plants in 2008 for $446.888 million, has since been talking about expanding power production at the site. With the group’s $150 million upgrades, the plants have each obtained increased availability factors, by 25% and 15%, respectively.

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