8-9-2023 (JAKARTA) Pertamina Geothermal Energy (PGE), a subsidiary of the Indonesian state energy company Pertamina, is in advanced negotiations to purchase a geothermal unit owned by KS Orka Renewables for a potential sum of up to $1 billion. Sources with knowledge of the matter have disclosed this information, hinting that a deal may be finalized before the end of the year if negotiations regarding the acquisition of PT Sorik Marapi Geothermal Power proceed successfully. However, they have cautioned that no agreement has been confirmed as yet.
KS Orka, a geothermal developer, had reportedly engaged DBS to explore the sale of Sorik Marapi earlier this year, but details remain private, and both Pertamina Geothermal and KS Orka have refrained from commenting on these developments.
Pertamina Geothermal’s interest in this acquisition aligns with its ambitions to double its geothermal capacity by 2027-2028, which is estimated to require an investment of approximately $4 billion. Indonesia, being Southeast Asia’s largest economy, is eager to leverage its geothermal resources to reduce energy imports and minimize carbon emissions.
If the deal is successfully negotiated, it could mark one of the largest transactions for Pertamina Geothermal since its domestic initial public offering in February, during which its shares have increased by 33 percent. Last month, the company signed preliminary agreements with two Kenyan firms to explore geothermal power projects, potentially worth a combined $2.2 billion.
Sorik Marapi, located in Mandailing Natal Regency in North Sumatra, is one of the most significant geothermal projects in development within Indonesia, boasting a capacity of up to 240 megawatts, as indicated on KS Orka’s website. KS Orka had acquired a majority share in the company in mid-2016, although the financial details of the transaction were not disclosed.
KS Orka Renewables was established in 2016 by China’s compressor manufacturer Kaishan Group, with a specific focus on the development of new energy through geothermal sources. In addition to Sorik Marapi, KS Orka has been involved in other projects, such as PT Sokoria Geothermal Indonesia in East Nusa Tenggara, as shown on their website.
