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ADB Commits $175.3 Million Geothermal Energy Investment in Western Indonesia

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The Asian Development Bank (ADB) today signed a loan agreement of approximately $175.3 million with PT Supreme Energy Rantau Dedap (SERD) to help finance the second phase of the company’s geothermal power project in South Sumatra Province, Indonesia. The deal adds to ADB’s continued efforts to scale up private sector-led infrastructure development and support clean energy investments in the Asia and Pacific region.

As part of the financing, ADB will also administer an additional loan provided by the Clean Technology Fund (CTF), which is a rollover amount from an existing CTF facility for the first phase of the project. The CTF loan for the first phase helped to confirm the commercial resource size and allow the project to proceed to financing of construction and operations.

“This innovative, phased financing proves that adequate risk allocation allows the private sector to successfully develop geothermal projects in Indonesia,” said Yuichiro Yoi, Unit Head for Indonesia at ADB’s Private Sector Operations Department. “The project also demonstrates Indonesia’s strong commitment to develop renewable energy sources to diversify its energy mix and reduce its carbon emissions.”

With an estimated 29,000 megawatt (MW) of potential in geothermal power generation, Indonesia has about 40% of the world’s geothermal reserves, making it an important resource for the country to achieve its commitments to reduce carbon dioxide emissions by 29% by 2030. The project will help Indonesia get closer to this goal, with the Rantau Dedap geothermal facilities expected to generate more than 90 MW of electricity, which will power up to 130,000 homes, create jobs, and avoid over 400,000 tons of carbon dioxide emissions every year by 2021.

SERD is a joint venture consisting of the Indonesian geothermal power developer, PT Supreme Energy; the Japanese trading and investment company, Marubeni Corporation; the Japanese power utility Tohoku Electric Power; and global energy leader ENGIE. In addition to ADB, the Japan Bank for International Cooperation and three commercial banks under a guarantee from Nippon Export and Investment Insurance are providing financing for the project worth approximately $188.8 million and $125.9 million, respectively.

The project is part of ADB’s continued efforts to address the risks and mitigate the impacts of climate change in developing member countries in the region. Some of the projects in Indonesia approved by ADB include the $350 million financing for the landmark 320 MW Sarulla Geothermal Power Development Project and the 80 MW Muara Laboh Geothermal Power Generation Project, which reached financial close in 2014 and 2017, respectively, and are also supported by CTF.

CTF is one of the four programs comprising the Climate Investment Funds and provides middle-income countries with concessional resources for the demonstration, deployment, and transfer of low-carbon technologies. ADB administers over $1.1 billion of CTF funding across sovereign and non-sovereign operations.

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New Satellite Data Reveals Progress: Global Gas Flaring Declined in 2017

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New satellite data released today shows a significant decline in gas flaring at oil production sites around the world in 2017, despite a half-percent increase in global oil production. The nearly 5 percent flaring decline begins to reverse years of increases in global gas flaring that started in 2010.

The data reveals about 141 billion cubic meters (bcm) of natural gas was flared in 2017, down from nearly 148 bcm in 2016. While Russia remains the world’s largest gas flaring country, it also saw the largest decline in flaring last year. Venezuela and Mexico also reduced their flaring significantly in 2017. In Iran and Libya there were notable increases in gas flaring.

The data was released by the Global Gas Flaring Reduction Partnership (GGFR), a World Bank-managed organization comprised of governments, oil companies, and international institutions working to reduce gas flaring. The U.S. National Oceanic and Atmospheric Administration (NOAA) and GGFR have developed the flaring estimates in cooperation with the University of Colorado, based on observations from advanced sensors in a satellite launched in 2012.

Gas flaring – the burning of natural gas associated with oil extraction – takes place because of technical, regulatory, and/or economic constraints. It causes more than 350 million tons of CO2 emissions every year, with serious harmful impacts from un-combusted methane and black carbon emissions. Gas flaring is also a substantial waste of energy resources the world can ill afford.

“The latest global gas flaring data is encouraging, but we will have to wait a few more years to know whether it represents a much-needed turning point,” said Riccardo Puliti, the World Bank’s Senior Director and head of its Energy & Extractives Global Practice. “Ending routine gas flaring is a key component of our climate change mitigation agenda, and the global flaring reduction Initiative we launched just three years ago now has 77 endorsers, covering about 60 percent of the total gas flared around the world.”

In 2015, UN Secretary-General Ban Ki-moon, World Bank President Jim Yong Kim, and 25 initial endorsers launched the “Zero Routine Flaring by 2030” Initiative that commits endorsers to not routinely flare gas in new oil field developments and to seek solutions to end routine flaring at existing oil production sites as soon as possible and no later than 2030. It has now been endorsed by 27 governments, 35 oil companies, and 15 development institutions.

“The Initiative is an essential tool for ending routine flaring,” said Bjorn Hamso, GGFR’s Program Manager. “Going forward, it is paramount that oil field operators continue to address ongoing “legacy” flaring, and that new business models are developed that will enable more investors to participate in flaring reduction projects.”

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World Tourism Day Places Focus on Innovation & Digital Transformation

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The importance of digital technologies in tourism, providing opportunities for innovation and preparing the sector for the future of work, is at the centre of World Tourism Day 2018, to be celebrated in Budapest, Hungary (27 September 2018).

World Tourism Day, celebrated every 27 September around the world, is a unique opportunity to raise awareness on tourism’s actual and potential contribution to sustainable development.

This year’s World Tourism Day (WTD) will help to put the opportunities provided to tourism, by technological advances including big data, artificial intelligence and digital platforms, on the map of sustainable development. The World Tourism Organization (UNWTO) sees digital advances and innovation as part of the solution to the challenge of marrying continued growth with a more sustainable and responsible tourism sector.

“Harnessing innovation and digital advances provides tourism with opportunities to improve inclusiveness, local community empowerment and efficient resource management, amongst other objectives within the wider sustainable development agenda”, said UNWTO Secretary-General Zurab Pololikashvili.

The WTD official celebration will be held in Budapest, Hungary, a country enjoying steady growth of tourism backed by consistent policy support and a commitment to the digital future. Other celebrations will take place worldwide.

The official celebration will also see the announcement of the semi-finalists of the 1st UNWTO Tourism Startup Competition, launched by UNWTO and Globalia to give visibility to startups with innovative ideas capable of revolutionizing the way we travel and enjoy tourism.

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EU and China step up cooperation on climate change and clean energy

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At the China-EU Summit on 16 July in Beijing, the President of the European Commission Jean-Claude Juncker, the President of the Council, Donald Tusk, and the Chinese Prime Minister Li Keqiang adopted a “Leaders’ Statement on Climate Change and Clean Energy”. Commission Vice-President Jyrki Katainen and the Chinese Minister of Ecology and Environment Li Ganjie signed a Memorandum of Understanding to enhance cooperation on emissions trading between China and the EU.

In the Leaders’ Statement, China and the EU underline the need to advance the implementation of the Paris Agreement under the UNFCCC process, and to get the Paris Agreement Work Programme – the rulebook for the implementation of the Paris Agreement – adopted at the next global climate conference in December 2018 in Katowice, Poland.

The Statement shows how the EU and China will intensify their political, technical, economic and scientific cooperation on climate change and clean energy to drive forward a world-wide transformation to a thriving low carbon and climate-resilient economy and society and clean energy system. It clearly shows their commitment to climate action and achieving a clean energy transition are urgent imperatives.

In the Memorandum of Understanding China and the EU acknowledge emissions trading as a cost-effective policy tool with significant potential to contribute to a low-carbon economy and the necessary innovation and deployment of low carbon technologies.

Welcoming this commitment, President Juncker said: We have underlined our joint, strong determination to fight climate change and demonstrate global leadership. It shows our commitment to multilateralism and recognises that climate change is a global challenge affecting all countries on earth. There is no time for us to sit back and watch passively. Now is the time for decisive action.

Commissioner for Climate Action and Energy Miguel Arias Cañete said: Further developing cooperation between the two largest emission trading systems of the world is not only in our mutual interest but also necessary to tackle common challenges in the mid- and longer term. The newly established policy dialogue will be instrumental in this context.

The Memorandum of Understanding on EU-China cooperation on emissions trading establishes a policy dialogue, foresees the joint organisation of seminars and workshops, as well as joint research activities.

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