PT United Tractors (UT), Astra Group’s heavy equipment, construction, and energy company, continues to explore new business potentials as it is completing the acquisition of a geothermal power generation company, PT Supreme Energy.
Astra’s entry into the geothermal business intensifies competition with other major players in the sector, including PT Pertamina Geothermal Energy (PGEO), PT Barito Renewables Energy (BREN), and PT Medco Energi Internasional (MEDC) through PT Medco Geopower Sarulla.
Sara K. Loebis, UT’s Corporate Secretary, said UT through its controlled company PT Energia Prima Nusantara (EPN) had completed the signing of a share acquisition agreement with PT Supreme Energy and PT Supreme Energy Sriwijaya (SES).
EPN acquired 984,127 new shares in SES, equivalent to a 49.6 percent ownership stake of the total issued shares. It successfully completed the payment with a total transaction value of US$ 51.87 million (IDR 805.48 billion).
“The transaction was closed on December 27, 2023, as all preliminary requirements in the agreement had been fulfilled by each party,” said Sara on Friday, Jan. 5, 2024.
Astra’s interest in geothermal prospects
The Astra Group is continually eyeing potential business growth areas to become a new growth engine in the long term, with a focus on renewable energy. In 2023 alone, the company allocated capital and investments amounting to IDR 39 trillion.
“Investing in business lines can be a good contributor and potentially become Astra’s growth engine in the long term; we are not talking about the short and medium term,” said Djony Bunarto Tjondro, President Director of Astra International.
Djony previously mentioned three considerations for the company in determining potential new business sectors: alignment with the company’s long-term vision and mission, how the company can directly contribute to that sector, and the cultural fit of the new business line.
In line with this vision, a research by Wood Mackenzie projects that Indonesia’s geothermal power generation capacity will grow to around 6.2 gigawatts (GW) by 2030, with an average annual growth rate (CAGR) of 10.4 percent.
This growth is faster than the global average CAGR of around 3.9 percent. The research also suggests that, by 2030, Indonesia will have the world’s largest geothermal capacity, contributing 28 percent to the projected global net geothermal capacity.
The government on the other hand has increased the national target for the share of renewable energy to 34 percent by 2030, up from the previous 23.4 percent.
“This growth is supported by Indonesia’s significant geothermal resource potential, rapid market demand growth, and policy support as a key part of the government’s roadmap to increase the contribution of renewable energy in the national energy mix,” stated Philip Sekuritas Indonesia on Friday.
On Friday’s trading, UT shares experienced a 0.11 percent correction to IDR 23,250 per share with a market capitalization of IDR 86.73 trillion.
Meanwhile, shares of Astra International (ASII), UT’s parent company, also declined by 1.32 percent to IDR 5,625 per unit, with a market capitalization of IDR 227.72 trillion.
