Indonesia’s Medco Energi sells 49% stake in geothermal subsidiary

Medco Energi's Sarulla geothermal plant in North Sumatera. Photo: Medco website

Indonesia’s listed energy company Medco Energi Internasional is selling a 49 per cent stake in subsidiary Medco Cahaya Geothermal (MCG) to New York-listed Ormat Geothermal Power for an undisclosed amount, according to a stock exchange filing.

Medco Energi owns 100 per cent of MCG through its arm Medco Power Indonesia (MPI).

MCG is the owner of a 110 MW geothermal power plant in Blawan-Ijen, East Java. The company has an electricity purchase agreement with the state-owned Perusahaan Listrik Negara (PLN) for 30 years. The project is currently still in the development phase and commercial operations are expected to start by the end of 2022.

Medco Energi has previously partnered with Ormat Geothermal for the development of the Sarulla geothermal power plant project in Tapanuli, North Sumatera.

The latest partnership with Ormat Geothermal is expected to provide additional value to Medco stakeholders and support the Indonesian government’s push to further develop the renewable energy sector, said MPI chief executive Eka Satria.

According to MPI’s website, MCG is entitled to a 35-year geothermal concession from Indonesia’s Ministry of Energy and Mineral Resources.

MPI had signed an agreement with Philippines-based Aboitiz Power Corporation in 2015 to sell a 49 per cent stake in MCG.  Aboitiz announced its withdrawal from the joint venture in early 2017 to focus on other ongoing and pipeline projects.