Indonesia Plans $500 Million Merged Geothermal Firm IPO

Indonesia is planning an initial public offering that could raise at least $500 million as part of its bid to create the world’s biggest geothermal company, according to people with knowledge of the matter.

The Southeast Asian nation, which last week announced its plan to combine three separate state-owned geothermal companies, is working with advisers to complete the tie-up within three months, said one of the people. The potential first-time share sale of the merged entity could take place in Jakarta as soon as the end of this year, the people said, asking not to be named as the process is private.

The firm would join PT Sanghiang Perkasa, a nutritional food unit of Jakarta-listed PT Kalbe Farma, and gold miner Archi Indonesia in seeking a listing in Indonesia this year. These offerings would give a boost to the IPO market in Southeast Asia’s largest economy. Indonesia hosted $110 million of IPOs so far this year, less than the $157 million raised over the same period in 2020, data compiled by Bloomberg show.

The move to combine the three state-backed businesses -- PT Geo Dipa Energy, PT Pertamina Geothermal Energy and PT PLN Gas and Geothermal -- would boost the nation’s use of renewable energy, Indonesia’s Deputy State-Owned Enterprises Minister Pahala Mansury said on Feb. 27.

Deliberations are still ongoing and details such as size and timeline may change, said the people. Representatives for Geo Dipa Energy and PLN Gas and Geothermal declined to comment. Mansury and a spokesperson for Pertamina Geothermal didn’t immediately respond to requests for comment.

The new company will have a generating capacity of 1,022.5 megawatts, accounting for nearly half of the country’s renewable energy output, according to a Jakarta Post report, citing Mansury.

Indonesia had 2.1 gigawatts of installed geothermal power capacity as of 2019, according to a Ministry of Energy and Mineral Resources report. The country is targeting 7.2 gigawatts of geothermal capacity by 2025 as part of a bid to meet 23% of its energy needs through renewables that year. Indonesia, which sits on the seismically active Pacific Ring of Fire, is estimated to have the world’s largest potential geothermal energy at 23.9 gigawatts, according to an Asian Development Bank report.

©2021 Bloomberg L.P.

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