Indonesia’s geothermal energy sector is drawing growing interest from major corporations, with the latest entrant being PT Dian Swastatika Sentosa (DSSA), a coal mining subsidiary of the Sinarmas Group, which has partnered with the Philippines’ Energy Development Corporation (EDC).

The collaboration will be carried out through their subsidiaries, PT DSSR Daya Mas Sakit (DSSA) and PT FirstGen Geothermal Indonesia (EDC). The joint venture aims to develop geothermal resources with a combined potential of 440 megawatts (MW) across six regions: West Java, Jambi, West Sumatra, Central Sulawesi, and Flores (East Nusa Tenggara).

DSSA’s entry adds to the growing list of major players already active in the sector, including PT Pertamina Geothermal Energy (PGEO), PT Barito Renewables Energy (BREN), PT Arkora Hydro (ARKO), and PT Kencana Energi Lestari (KEEN).

Sukarno Alatas, Senior Equity Research Analyst at Kiwoom Sekuritas, said that Indonesia holds the world’s largest geothermal reserves of around 24 gigawatts (GW), though only about 2.6 GW has been installed.

“Demand for clean energy and regulatory support make the sector highly prospective, but exploration costs, licensing hurdles, and social risks remain significant challenges,” Sukarno said on Tuesday, September 9, 2025.

PGEO, as a state-owned enterprise, dominates the sector with 727.5 MW of managed capacity out of a total 1,933 MW under concession. Meanwhile, BREN, through its subsidiary Star Energy, is the largest operator with 886 MW installed capacity plus an additional 112 MW under expansion. However, Sukarno cautioned that BREN’s stock is already trading at a premium, making it more sensitive to new project catalysts.

For DSSA, contributions from geothermal projects are expected to remain minimal in the short term as operations are still at an early stage.

Separately, Mirae Asset Sekuritas Senior Market Analyst Nafan Aji Gusta noted that Sinarmas’ move into geothermal energy is a logical measure, given rising demand for clean energy.

“Geothermal will be increasingly important as Indonesia reduces its reliance on coal,” Nafan said.

Reflecting the strong outlook, Nafan recommended accumulating PGEO shares with a target price of Rp1,725 per share. Kiwoom Sekuritas also issued a buy recommendation for PGEO, citing its strong resource base and dominant position in the geothermal industry.