UAE’s Masdar buys shares in Indonesia’s Pertamina Geothermal Energy

Dubai: Masdar has made a strategic investment in Indonesia-based Pertamina Geothermal Energy (PGE), it said on Friday. This investment marks Masdar’s entry into geothermal energy, in the second-largest geothermal market in the world.

“Achieving the 1.5C target set out in the Paris Accords will require humanity to leverage all sources of low-carbon energy, including sources that are currently under-utilized, like geothermal,” said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and Chairman, Masdar. “Through its investment in PGE, Masdar is demonstrating its continuing commitment to Indonesia’s energy transition and its support of one of the major focus areas of the upcoming COP28, which is to provide practical energy security solutions while reducing emissions.”

Ahmad Yuniarto, Chief Executive Officer, PGE, said, “We endeavor to develop 600 megawatts (MW) in additional installed capacity over the next five years to support Indonesia’s renewable energy mix.”

Geothermal energy

Geothermal energy harnesses the heat generated within the Earth’s core to provide a constant energy source, unlike solar or wind, which are intermittent in nature. Geothermal energy plants also have high-capacity factors, meaning they can run at maximum power for longer periods. These attributes mean geothermal energy could potentially play a significant role in the clean energy transition, helping nations with a high concentration of geothermal activity to reduce carbon emissions.

The PGE investment is the latest in Masdar’s ongoing effort to expand and increase its strategic partnerships in the Asia-Pacific region. Masdar is already developing the region’s largest floating solar facility – the 145-MW Cirata Floating Solar PV Plant in Indonesia – and last year signed an agreement with Tuas Power, EDF Renewables, and PT Indonesia Power to explore development of up to 1.2 GW solar capacity in Indonesia for export to Singapore.

“Masdar’s strategic investment in PGE will complement our already strong footprint in Indonesia, the world’s second largest geothermal market,” said Mohamed Jameel Al Ramahi, Chief Executive Officer, Masdar. “We are especially excited to add geothermal energy to our clean energy portfolio, a clean energy source that can deliver dispatchable power 24 hours a day, which further underscores our position as a global leader in delivering clean energy solutions that help drive the global energy transition.”