Friday, August 19, 2016

Indonesia: Geothermal Association is Against PT PLN/PGE Merger

Geothermal Companies Against PGE Acquisition by PLN (

Geothermal companies in the Indonesian Geothermal Association (INAGA) are against PT PLN's plan to acquire Pertamina Geothermal Energy (PGE), a subsidiary of PT Pertamina. INAGA argues that PLN's reason to acquire PGN, which is for operational efficiency, is just an excuse.

INAGA chair Abadi Purnomo said geothermal exploration and development costs will not drop because of an acquisition. The reason is because geothermal business chains depend on investment climate, which determined by oil and gas factors.

"The acquisition plan is nothing but a plan to spend money. That fund is better off used for expanding electricity distribution or building new power plants," he told Tempo Wednesday, August 17, 2016.

PLN actually already have a subsidiary engaged in the geothermal business, PLN Geothermal. But the subsidiary has made no significant actions. Meanwhile, Pertamina's PGE manages eight geothermal power plants.

Pertamina president director Dwi Soetjipto said there is no certainty about PLN's plan to acquire PGE. The decision depends on the process of due diligence and feasibility studies.

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