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Energy transition, sustainability to boost Pertamina geothermal arm IPO: Analysts
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Eco-friendly energy: Two technicians of state-owned oil and gas giant PT Pertamina work on a geothermal power plant in West Java. Pertamina continues to boost the use of geothermal energy to encourage a more eco-friendly energy transition in Indonesia. (Courtesy of Pertamina)
A
n initial public offering (IPO) by Pertamina Geothermal Energy (PGE), the geothermal arm of state-owned oil and gas giant Pertamina, is expected to receive a positive response from the market with its business being in line with the world’s shift toward renewables and sustainable investments.
PGE, under the ticker PGEO, plans to raise up to Rp 9.78 trillion (US$ 653.7 million) through an IPO in February, mainly aimed at covering working capital needs, including capital expenditure (capex) for future projects.
Analysts have told The Jakarta Post the IPO comes at the right time, considering green investments are expected to shoot higher as countries commit to cutting their greenhouse gas emissions by moving toward renewables.
“The story investors are going to keep in mind is that fossil energy, such as oil and coal, will be replaced by renewable energy in the long run. The opportunity now is fitting because of the renewable energy campaign,” Teguh Hidayat, director of PT Avere Mitra Investama told the Post on Friday.
An impressive $1.1 trillion flowed into the clean energy sector in 2022, the “Bloomberg New Energy Finance” (BNEF) report shows. Almost every sector hit record levels of investment last year with renewable energy receiving the lion’s share of $495 billion, marking 17 percent year-on-year growth.
Read also: Pertamina geothermal unit slated to go public in H1
Ahmad Zuhdi Dwi Kusuma, an industry and area analyst at state-owned Bank Mandiri, said investors would have an interest in investing in PGE given the prospects of geothermal in the future.
