Ratification of UNFCCC and Kyoto Protocol by the Government of Indonesia trough Law Number 6/1994 and Law Number 17/2004 give the opportunity to Indonesia to participate with the world effort in solving the climate change problems caused by global warming. This is also in line with the results of the Paris World Climate Summit (UNFCCC COP21) in which Indonesia has committed to reducing GHG emissions by 2030 by 29% on its own, and up to 41% with international assistance and co-operation keeping the earth’s average temperature rise below 2%. The form of that participation is by being involved on the Clean Development Mechanism (CDM) in energy sector trough the development of combine cycle power plant in Java-Madura-Bali (JAMALI) power system. The objective of this research is to determine the feasibility and financial impacts of applying low-carbon projects of combine cycle gas turbine power plant to be proposed as a CDM project by Independent Power Producer. The analysis resulted of a 145 MWel combined cycle power plant (CCPP) with the contract period of the Power Purchace agreement over 20 years, in the base case without CDM finance, the equity IRR of the project is 10.16% without considering the additional revenue from the registration of the project as CDM project. Upon considering the additional revenue from registration of the project as CDM project the IRR would be 13.31%, which is close to the equity benchmark IRR of 13.22%, which can be achieved under the upside scenarios when including CDM financing. The benchmark rate used for this indicator is the Investment Rate published by the Indonesian central bank (Bank Indonesia). The average investment rate for the most recent three years 13.22%.

Keywords : Clean Development Mechanism, Combine Cycle Power Plant.