Green Business Expansion is Booming Among Indonesian Corporations

December 02, 2023, 11.16 PM  | Reporter: Arfyana Citra Rahayu, Muhammad Julian, Yuwono Triatmodjo
Green Business Expansion is Booming Among Indonesian Corporations

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GREEN BUSINESS - JAKARTA. The business of new and renewable energy (EBT) is increasingly attracting the interest of Indonesian conglomerates. Evidently, more and more top-tier issuers owned by aggressive tycoons are venturing into this clean energy business.

The latest is the expansion carried out by issuer owned by Prajogo Pangestu. Through PT Barito Renewables Energy Tbk (BREN), Prajogo is set to launch a trillion rupiah acquisition in the EBT sector.

A KONTAN source whispered that BREN is currently negotiating to acquire a wind power plant (PLTB) in Sulawesi. "The value is US$ 100 million," said the KONTAN source, Wednesday (29/11).

If there are no obstacles, the acquisition will be completed by the end of this year. This expansion aligns with BREN's decision to establish a new subsidiary named PT Barito Wind Energy, last October.

This new subsidiary will be BREN's vehicle to develop wind power-based energy business. Unfortunately, the KONTAN source did not inform which PLTB will be acquired.

KONTAN also asked for an explanation from BREN management about the acquisition news. "BREN is actively working on various EBT potentials, including wind power. But, we can't confirm anything yet," said Merly, BREN's Corporate Secretary, to KONTAN, Thursday (30/11).

Another top-tier issuer aggressively venturing into the green sector is PT Adaro Energy Tbk (ADRO). This issuer, owned by tycoon Boy Thohir, is preparing the Mentarang Induk Hydroelectric Power Plant (PLTA) project in North Kalimantan.

This largest PLTA in Indonesia requires an investment cost of US$ 2.6 billion or equivalent to Rp 40 trillion, and is targeted to operate in 2030.

Investor Relation Adaro Energy Indonesia, Danuta Komar said, the groundbreaking of Mentarang Induk PLTA has been carried out in March 2023. "In the next 12 months, it is expected to reach the signing of the power purchase agreement," she said, Tuesday (28/11).

In addition to PLTA, Adaro is developing a rooftop solar power plant (PLTS) in Kelanis, Central Kalimantan. However, this 130 kWp capacity PLTS is specifically to serve the electricity needs in the Adaro mining area.

Another company that is no less aggressive in working on the green business is PT United Tractors Tbk (UNTR). This subsidiary of PT Astra International Tbk is actively promoting the development of EBT business, as a diversification agenda in the non-coal segment.

UNTR's Corporate Secretary, Sara K. Loebis said, UNTR continues to boost revenue contribution from the non-coal segment, with a revenue contribution target of up to 50% in 2030.

"(Diversification to the EBT sector) For the balance of non-coal portfolio," said Sara to KONTAN, Friday (1/12).

UNTR began its foray into the green energy business by venturing into the geothermal sector. In this business, UNTR took 40.476% of the new shares issued by PT Supreme Energy Sriwijaya. Currently, UNTR is also conducting studies to develop other types of EBT, such as PLTA, PLTB, to floating solar PV.

Energy Analyst of the Institute of Energy Economics and Financial Analysis (IEEFA), Putra Adhiguna said, the transition to cleaner energy is driving businesses to identify new business opportunities.

"The prospects in Indonesia are indeed starting to open, but opportunities are still relatively limited due to the difficulty of PLN's position in opening opportunities for large-scale EBT projects," he said, Friday (1/12).

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