Indonesian company plans IPO to help develop four hydropower projects in Sumatra

Jakarta, Indonesia-based Terregra Energy Asia said it plans to launch an initial public offering (IPO) of shares on the Indonesian Stock Exchange (IDX) next month to, in part, raise funds to develop four hydropower projects in Sumatra, expected to cost US$70-90 million.

According to Terregra, the company plans to list its shares in May, hoping to raise Rp 200 billion (US$16 million).

Terregra Energy Asia has two divisions, PT Terregra Hydro Power (THP), and PT Terregra Solar Power.

Terregra would offer about 600 million shares, or 21% of the issued and paid capital.

According to the Jakarta Globe, the IPO bookbuilding process to gauge investor interest began April 10 and will continue to April 19. Terregra is pursuing an effective statement from the Indonesian Financial Services Authority to initiate the offering and plans to receive it on April 27. The company is targeting May 8 or 9 to list its shares on the IDX.

Currently, the company said it plans to finalize development for as many as four small hydropower projects located in Tapanuli, North Sumatra, which would have a total combined installed capacity of 40 MW. THP plans to begin construction on the plants this year ahead of commissioning the facilities in 2019.

In addition to needed hydropower development, Indonesia is making an effort to maintain its existing dam infrastructure.

In February, reported the World Bank Board of Executive Directors announced it approved $125 million in financing to support the second phase of the Dam Operational Improvement and Safety Project for Indonesia. The Asian Infrastructure Investment Bank is co-financing the project with an additional $125 million.

The program is intended to upgrade more than 140 dams throughout Indonesia and make them safer for the 11 million people living near the reservoirs, according to the World Bank.

In the next five years, THP said it will work on 12 hydropower projects that could have a total combined installed capacity of up to 490 MW.

Vice President of Terregra Asia Energy, Lasman Citra, said areas of Sumatra have a high potential for harnessing hydropower and the company’s business coverage area includes ​​the island of Sumatra and East Indonesia.

Terregra has signed a power purchase agreement with the state-owned electric utility PT Power Negara for the four projects and the PPA will last for 20-30 years.

Currently, the company’s power generation portfolio of installed capacity is 72 MW, which includes hydro and solar power energy.

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Gregory B. Poindexter formerly was an associate editor for

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