Formulating Interest Subsidy Program to Support the Development of Electricity Generation from Palm Oil Mill Effluent (POME) Biomass: An Indonesian Case Study

Abstract

This paper analyses financial feasibility and cost-benefit and formulates the relevant subsidy program that is currently implemented by the government. We find that providing interest subsidy is financially feasible only if it serves to substitute the consumption of diesel. The benefits are higher than the costs among three types (45 t, 60 t and 75 t) of the palm waste generator capacity. The paper also reveals that Credit Program is relevant with the objective, to provide interest subsidy to farmers, but certain adaptations are required.

Keywords

• Cost and benefit analysis
• Credit program
• Financial feasibility
• Interest subsidy
• POME