Indonesia’s PT Barito Renewables energy Tbk is preparing an IPO on the Indonesian stock exchange, following PT Pertamina Geothermal Energy Tbk (PGEO), another geothermal operator that entered the market earlier this year.
Barito Renewables began its operations through one of its subsidiaries, Star Energy Geothermal Group, a geothermal electricity producer acquired in 2017/2018.
As a group, the company now operates three geothermal assets located in West Java, with a total installed capacity of 88 6 MW, which accounts for approximately 38% of the market share in Indonesia.
Meanwhile, as of June 30 2022, PGEO holds rights to 13 geothermal concessions, either directly or indirectly, with a total installed capacity of 1,877 MW, of which 672 MW is operated by PEGO itself, while 1,205 MW are managed by joint operating contractors.
Analysts at NH Korindo Sekuritas view this move by Barito Renewables as promising and well-timed, aligning with the current goal of Indonesian government for renewable energy deployment.
According to data from ThinkGeoEnergy and NS Energy, Indonesia ranks as the second largest geothermal energy producer globally, following the U.S. In 2022, Indonesia is recorded as having a national electricity generation capacity of 2,356 MW.
Assuming that the offering price is set to its highest of IDR 780 per share, Barito Renewables will potentially earn IDR 3.51 trillion of fresh funds.
With the additional capital gained from this IPO, the company plans to increase installed capacity of its geothermal power plant, and in turn, raise its gross installed capacity to 1,032 MW in 2027.
Analysts predict that Barito Renewables’s presence on the Indonesian Stock Exchange is expected to have an impact on the growth of market demand, where this will ultimately become one of the drivers for Indonesia to achieve its goal of becoming the country with the largest geothermal capacity in the world by 2030.
This condition is also expected to be an advantage for the company because in general investors will pay attention to issuers who prioritize performance targets that are in line with government policy.
Barito Renewables’s move to carry out an IPO can be interpreted as an initial steppingstone that encourages similar companies to plan IPO corporate actions in Indonesia, for example PT Supreme Energy.