Indonesia’s Barito Renewables Energy made a strong market debut in Jakarta, surging 25% on Monday, following its successful initial public offering (IPO) last week, which raised 3.13 trillion rupiah (approximately $200 million). The company’s shares opened at 975 rupiah each on the Indonesia Stock Exchange (IDX), a notable increase from their IPO price of 780 rupiah, which was already at the top end of the price range. Barito Renewables Energy offered more than 4 billion shares to the public, constituting a 3% stake in the company, a subsidiary of Indonesia’s Barito Pacific energy group.
However, this surge triggered an upper limit transaction restriction on the IDX, causing a brief trading halt for the rest of the session. This listing represents a significant test of investor interest in Indonesia’s relatively underdeveloped renewable energy sector, especially in the lead-up to next year’s presidential and legislative elections, which are typically characterized by reduced corporate activity.
This successful fundraising effort follows the IPO of Pertamina Geothermal Energy (PGE), a unit of the state-owned oil and gas giant Pertamina, which raised 9.056 trillion rupiah in February. PGE initially saw modest trading performance but has since seen its shares rise by 74% from its IPO price of 875 rupiah, closing at 1,520 rupiah on Monday.
Barito Renewables is a contractor for PGE and operates three geothermal power plants in West Java province, boasting a combined installed capacity of 886 megawatts. PGE exclusively supplies electricity to the state utility Perusahaan Listrik Negara, which holds a monopoly over Southeast Asia’s largest economy’s power grid.
CEO Tan Hendra Soetjipto highlighted the company’s growth during his speech at the IDX before trading commenced, stating that Barito Renewables had expanded from 110 megawatts to 886 megawatts of geothermal electricity generation. He believes that Barito Renewables’ IPO will serve as a benchmark for the valuation of renewable energy firms and that the company’s clean and renewable energy solutions will help combat pollution in Jakarta, aiming to “make the sky blue again.”
Both Barito and PGE are eyeing business opportunities stemming from Indonesia’s broader push to achieve net-zero carbon emissions by 2060, which includes the acceleration of renewable energy adoption and the decommissioning of coal-fired power plants, responsible for the majority of the country’s electricity generation.
Unlike intermittent sources like solar and wind power, geothermal energy offers a relatively stable and consistent electricity supply. Indonesia boasts an estimated 27.8 gigawatts of geothermal resources, ranking second globally only to the United States. However, the country’s installed geothermal capacity totaled just 2.3 gigawatts last year.
Geothermal energy harnesses thermal energy from the Earth’s interior to generate electricity, producing no emissions in the process.
Barito Renewables plans to allocate the proceeds from its IPO to its wholly owned subsidiary, Star Energy, which operates the three West Java plants, including paying off $127.8 million in Star’s bank loans. The company also has expansion plans, aiming to increase the installed capacity of its Wayang Windu plant to 253.5 megawatts by 2025. Furthermore, Barito Renewables identifies over 300 megawatts of additional potential capacity across all three geothermal plants.
Indonesian billionaire Prajogo Pangestu controls the parent company of Barito Renewables and also holds stakes in Chandra Asri Petrochemical, Indonesia’s largest petrochemical group, and Indo Raya Tenaga, involved in the construction of a 2-gigawatt coal-fired power plant in Banten province. In September, Indo Raya signed a memorandum of understanding with South Korea’s Doosan Enerbility to explore ammonia co-firing at the Banten plant as a means to reduce carbon emissions.
Pangestu expressed pride in launching Barito Renewables as a publicly listed company at the IDX, emphasizing their commitment to supporting the government’s sustainable energy transition program and working towards the net-zero emissions goal.
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