Pertamina Geothermal Energy IPO Is Considered To Have Improved Company Competitiveness

Photo: Doc. Antara

JAKARTA - Senior Advisor of the Indonesian Geothermal Association (API) Abadi Poernomo assesses the positive initial public offering (IPO) or the initial share offer of PT Pertamina Geothermal Energy (PGE).

By entering the stock market, he said, PGE will be more efficient which in the end will also increase the company's competitiveness.

"Efficiency affects PGE's competitiveness. And in the end, electricity rates can be even stronger," he said, quoted from Antara, Wednesday, February 8.

The increase in efficiency and also the effectiveness of the use of funds, according to him, is closely related to the existence of outside shareholders, especially because there is also a principle of transparency in open companies.

"That's why, through the IPO, control over the company becomes more stringent," said Abadi.

PGE's IPO, he said, was the right effort, because it was a way to get cheaper and much needed funding support, because geothermal investment was very expensive.

"This means that with the entry of funds through the IPO, PGE can expand stronger. Thus, through the PGE IPO, it can focus more independently, although 70 percent is still held by Pertamina. But at least, it is more agile in terms of funding," he said again.

He stated that previously PGE could get from loan institutions, for example the World Bank at low interest rates, but companies are required to pay loans every year.

"This is different from the IPO. Because through the IPO, profit or loss can be shared with shareholders," he also said.

According to him, abroad many energy companies have been found entering the stock market. In general, the company is engaged in renewable energy, such as hydro and hybrid photoponic solar.

On the other hand, Abadi agreed that PGE's IPO also supports achieving the Net Zero Emission (NZE) target no later than 2060, because geothermal is indeed a "backbone" in an effort to support decarbonization.

"Geothermal and hydro are most sustainable with new and renewable energy. The effectiveness of geothermal heat can reach 90-100 percent. Meanwhile, photoponic is only around 17 percent," he also said.