Pertamina Geothermal Shifts to ‘Execution Mode’ with $860 Million Push to Hit 1 GW Target

JAKARTA, Investortrust.id — PT Pertamina Geothermal Energy Tbk (PGEO), the renewable energy arm of Indonesia’s state energy giant Pertamina, is officially shifting into high gear. The company announced Tuesday it has moved past the "planning phase" and is now aggressively executing a pipeline of projects to cement its status as a 1-gigawatt (GW) powerhouse.

The transition marks a pivotal moment for the publicly-listed firm as it seeks to monetize Indonesia’s massive volcanic energy reserves. "We are no longer talking about plans; we have entered the execution stage. Our number one priority is the path to becoming a one-gigawatt producer," PGEO Director of Exploration & Development Edwil Suzandi confirmed during an online press conference on May 5.

For global Environmental, Social, and Governance (ESG) investors, PGEO represents the most liquid vehicle to play Indonesia’s energy transition. By accelerating "low-risk" brownfield expansions like Ulubelu and Lumut Balai, the company is significantly lowering its execution risk profile.

If PGEO successfully hits the 1 GW milestone, it will not only secure long-term dollar-linked cash flows through its Power Purchase Agreements (PPAs) but also position Indonesia as a global leader in geothermal capacity, trailing only the United States.

The $867 Million Expansion Map

The centerpiece of this "Gaspol" (full throttle) strategy is the Ulubelu Unit 1 and 2 expansion, which carries a price tag of $449 million. This project has already entered the pre-qualification tender stage, with a firm target to go online by 2028.

Beyond new units, PGEO is betting $418 million on "cogeneration" technology. This involves squeezing additional power—up to 230 MW—from existing geothermal streams. Suzandi noted that these are not "early-stage" gambles but projects already moving toward realized capacity, building on the company's current operating base of 727 MW.

De-Risking the Pipeline

The company’s growth is no longer speculative. Suzandi revealed that the Lumut Balai 3 project has reached a Final Investment Decision (FID), with initial drilling scheduled to begin immediately to add 55 MW. Lumut Balai 4 will follow a phased five-year development timeline.

"The projects are certain, and the execution risk has decreased significantly," Suzandi said during the conference. He added that the commercial viability of these sites is now ironclad, as tariff agreements for the Lahendong and Ulubelu projects have been finalized, ensuring that "revenue and financing structures are increasingly clear."

Fueling Growth via Green Finance

To bankroll this $860 million+ blitz, PGEO is tapping into the global appetite for green debt. The company has successfully secured a spot in the Bappenas (National Development Planning Agency) "Blue Book," a prerequisite to accessing low-interest funding from the World Bank and the Asian Development Bank (ADB).

By leveraging international green financing, PGEO aims to keep its cost of capital low while scaling 2.5 times its current capacity by 2033. This strategy effectively insulates the company from domestic interest rate volatility while attracting institutional investors mandated to hold sustainable assets.

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