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Miners look to S. Korea, China amid low investment
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Activities at one of the coal mining sites owned by PT Adaro Indonesia in Balangan, South Kalimantan. (The Jakarta Post/R. Bertho Wedhatama)
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ndonesia’s second-largest coal producer, PT Adaro Energy, has started looking to China and South Korea for potential funding sources as countries in Europe have shifted away from investing in coal-related businesses such as power plants and mining due to climate concerns.
A report released in February by global energy think tank Institute for Energy Economics and Financial Analysis (IEEFA) shows that over 100 global financial institutions have shifted away from thermal coal, including 40 percent of the top 40 banks and 20 insurers.
Dharma Djojonegoro, the vice president of Adaro Energy’s power subsidiary PT Adaro Power, told the press on Wednesday that finding new financing for a coal-fired power plant (PLTU) project has become difficult.
However, he remains upbeat about financing options from China and South Korea.
“It’s hard for us to find financing for our new projects. It now comes down to two options: go to China [for investment] or play in the renewable energy sector with a solar [photovoltaic] power plant or gas-fired power plant,” he said, adding that financiers from Europe and Japan have fully closed their funding to coal.
Last month, publicly listed local coal miner PT Toba Bara Sejahtra inked a partnership deal with Powerchina International Group for two “electrification” projects, namely Sulbagut-1 and Sulut 1. The deal was part of China’s trillion-dollar global investment program called the Belt and Road Initiative (BRI).
Dharma of Adaro Power also said that besides China, some financiers are still “tolerant” to any PLTU investment but only if the facility used a critical form of technology that would require less coal to be burned or support lower emissions.
