Milbank LLP is delighted to be acting as international counsel to PT Supreme Energy Muara Laboh in connection with the development and financing of the next phase of the Muara Laboh Geothermal Power Project in Indonesia, which will expand the project’s generating capacity to approximately 170 MW, doubling the current capacity. Milbank also advised on the development and financing of the first phase of the project, which achieved commercial operation in 2019. PT Supreme Energy Muara Laboh is a joint venture company owned by PT Supreme Energy, Sumitomo Corporation and INPEX Corporation.
The Milbank team advised on the new financing agreements with ECAs and multilaterals, which were signed on January 10, 2025. This involved complex structuring issues to meet the requirements of existing project loans that remain in place. The expansion financing is being provided by the Japan Bank for International Cooperation (JBIC), the Asian Development Bank (ADB), Nippon Export and Investment Insurance (NEXI) and four leading international commercial banks.
The additional capacity will be sold to PLN under a long term PPA and is expected to provide electricity to 760,000 households connected to the Sumatra grid and crucially to increase the contribution from renewables to Indonesia’s energy mix, reducing emissions by about 900,000 tons of CO2 per year. The construction phase of the power plant is also expected to provide employment opportunities for 1,500 people.
“We are extremely proud to be advising on this major expansion of the Muara Laboh Geothermal project,” said Milbank partner James Murray. Mr. Murray added that “with Milbank’s experience advising on project financings in Indonesia spanning decades, it is gratifying to see how our deep knowledge allows us to navigate various structuring complexities.” Partner James Orme echoed those sentiments and also noted that “the Milbank team is extremely fortunate to work with the leading developers and lenders active in the region and to be able to contribute to the success of cutting-edge projects such as Muara Laboh.”
The significance of the Muara Laboh Geothermal Power Project’s expansion was underscored by Japan’s Prime Minister, Shigeru Ishiba, during his recent state visits to Malaysia and Indonesia. The prime minister said that JBIC and other lenders would support the Muara Laboh Geothermal Power Project under the Asia Zero Emission Community initiative.
The Milbank team is led by partners James Murray and James Orme in Singapore, and includes special counsel Andrew Gibb and associates Zhen Kua, Deirdre Swift and An Guo.
This transaction is yet another example of Milbank serving as the go-to lead counsel for deals in the power sector. The team has advised on many of the key geothermal IPPs in Indonesia that have raised non-recourse project financing from international banks, including advising sponsors on Sarulla and Rantau Dedap in Indonesia, each award-winning deals and financed with loans from agency lenders. The firm also advised on Star Energy’s very successful acquisition (and subsequent bond take-out) of the Darajat and Salak geothermal projects, the Wayang Windu geothermal assets, and an agency lender on the proposed financing of the Sorik Marapi geothermal project in Indonesia. In the past five years, more than 20 transactions led by the Milbank Asia team have received “Deal of the Year” awards from industry publications. Chambers has designated several members of the firm's Asia project finance team as “Leading Individuals” and also designated Milbank as “Band 1” for its work in Projects, Energy and Infrastructure in Asia-Pacific.
