PT Pertamina Geothermal Energy Tbk (PGE/PGEO), has issued green bonds worth US$ 400 million (IDR 5.95 trillion). The company received oversubscriptions of 8.25 times with a total bid of US$ 3.3 billion (IDR 49.12 trillion).
In addition, the company offers attractive yields with an interest of 5.15% per year which mature in 2028.
The company plans to use all of the green bond funds to pay off the remaining debt as stated in the facilities agreement dated June 23, 2021.
A large green energy company
“PGEO’s is a major player in the business of producing environmentally friendly energy,” explained Myrdal Gunarto, Economist at Maybank Indonesia’s Global Markets.
Currently, PGEO is aggressively expanding the state-owned geothermal capacity and has raised US$ 597 million through an IPO. With IPO valuation reaching IDR 9.05 trillion, PGEO ranks as the 5th largest in terms of valuation within the 2021-2023 period.
Meanwhile, the strategic investment of energy company Masdar from the United Arab Emirates (UAE) and the Indonesia Investment Authority (INA) is IDR 6.75 trillion (US$ 450 million).
Analyst response
Gunarto said the positive response from the green bond offering was due to the company’s positive performance because it attracted high investors.
“PGEO is a major player in the business of producing new and renewable energy that is environmentally friendly,” explained Gunarto.
Nelwin Adriansyah, Finance Director of Pertamina Geothermal Energy, said that there are other conditions for PGEO’s success on the green bonds issuance.
Some of those factors include getting ‘A’ credit rating from global rating agencies, and second, having the Green Financing Framework. PGEO has a rating of ‘Baa3’ from Moody’s and ‘BBB’ from Fitch Ratings.
