Make Sure It Doesn't Affect Performance, Indika Energy Starts To Divest Coal Assets

Coal illustration (Photo: dock. Antara)

JAKARTA - PT Indika Energy Tbk (INDY) has begun to aggressively carry out business transformations towards a sustainable business. Deputy President Director and CEO of the INDY Group Aziz Armand revealed that since 2021 Indika has formulated an ESG strategy as well as calculated baselines and made targets ambiguous for several aspects of relevant energy. According to him, Indika is also committed to increasing revenue from the non-coal sector to reach 50 percent in 2025 and NZE in 2050. In the last two years we have started divesting coal assets in its subsidiaries, PT Petrosea Tbk to PT Caraka Reksa Optima and divestasi shares of PT Mitrabahtera Segara Sejati Tbk (MBSS) to PT Galley Adhika Arnawama. Not long ago, Indika also released its share ownership in Multi Tambangjaya Utama (MUTU). "Recently, we also signed an initial sale agreement to divest one of our coal assets," Aziz said in his presentation at Tripatra Engineering Summit, Friday, October 13. Regarding the influence of the divestment of the company's performance, Aziz revealed that the coal produced by MUTU only ranged by 1.5 million tons per year, so that the divestment was not significantly affected.

"Actually, from MUTU, the production is only 1 and a half million, so from the overall revenue it doesn't have much effect. It's there but it's not significant," added Aziz.

In addition to releasing its share ownership in coal subsidiaries, continued Aziz, the company is also diversifying investment, the company's business and portfolio from coal to new and renewable energy such as the solar power sector, electric vehicles through the Alva brand and the natural-based solution sector. INDY also targets to achieve revenue of up to 50 percent of the non-coal sector by 2025. "Hopefully 2025 will have a balance of 50:50," continued Aziz. Just so you know, until the end of 2022 the INDY coal segment will still contribute 88.3 percent of the total revenue or increase from 2021 by 87.1 percent.