Information on the Target

PT DSSR Daya Mas Sakti ("DSSR"), a subsidiary of PT Dian Swastatika Sentosa Tbk ("DSSA") and part of the Sinar Mas Group, has initiated a strategic collaboration with PT FirstGen Geothermal Indonesia, a subsidiary of the Energy Development Corporation ("EDC"), which is part of First Gen Corporation. EDC holds a prominent position as the largest renewable energy producer in the Philippines.

This partnership is more than just an investment; it represents a strategic collaboration designed to leverage EDC's expertise and experience in geothermal development within Indonesia. The ultimate aim is to strengthen national capacities and harness geothermal energy’s potential to provide clean energy solutions. According to Lokita Prasetya, President Director of DSSR and Vice President Director of DSSA, the partnership aims to deliver tangible benefits to the community, economy, and environment.

Industry Overview in Indonesia

Indonesia possesses approximately 40% of the world's geothermal reserves, equivalent to around 24 gigawatts. However, only about 10% of these reserves have been tapped, illustrating significant potential for growth in this sector. The country’s geothermal resources are strategically located across multiple regions, including West Java, Flores, Jambi, West Sumatra, and Central Sulawesi, where DSSR will focus its development efforts.

The Indonesian government is actively promoting the utilization of renewable energy as part of its commitment to reducing carbon emissions. This strategic move not only supports the global agenda against climate change but also aligns with domestic interests to enhance energy security and reduce reliance on fossil fuels.

In recent years, there has been a marked increase in investments aimed at developing renewable energy technologies and infrastructure. Significant initiatives are underway with the goal of achieving the country’s targets, including Net Zero Emissions by 2060. The collaborative effort with EDC is a notable step in accelerating this transition.

Moreover, collaboration between private enterprises, governmental bodies, and local communities is essential for maximizing the benefits of geothermal energy and ensuring sustainable development. EDC’s partnership with DSSR reflects this necessity and aims to create a mutually beneficial scenario for all stakeholders involved.

The Rationale Behind the Deal

DSSR's joint venture with EDC is founded on the intention to capitalize on Indonesia’s untapped geothermal resources and enhance energy production capacity. By aligning with a global expert in geothermal energy like EDC, DSSR aims to not only develop projects but also cultivate local expertise and promote knowledge transfer within the energy sector.

This strategic collaboration is geared toward defining a clear path for the development of geothermal projects that can meet the growing energy demands of Indonesia while supporting sustainable practices and reducing environmental impacts.

Information About the Investor

Energy Development Corporation (EDC) stands out as the world’s largest integrated geothermal energy company, boasting decades of expertise in the renewable energy sector. With a robust record of successfully harnessing geothermal resources in the Philippines, EDC is now leveraging its global experience to support Indonesia's energy transition.

EDC's Vice-Chairman and CEO, Francis Giles B. Puno, highlighted the importance of this partnership in strengthening Indonesia’s energy transition. Through the collaboration with DSSR, EDC seeks not only to implement high-capacity geothermal projects but also to fortify local skills and capabilities that foster long-term growth within the Indonesian renewable energy landscape.

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The joint venture between DSSR and EDC is poised to be a beneficial investment, considering the vast geothermal potential of Indonesia. The partnership harnesses EDC's proven track record and expertise in the geothermal sector, which significantly enhances the probability of successful project implementation. With the Indonesian government’s strong commitment towards renewable energy, this collaboration is likely to align well with regulatory support and future incentives.

Additionally, the collaboration places an emphasis on community benefits and environmental sustainability, which can positively influence public perception and encourage broader support for geothermal projects. This strategic alignment is crucial for gaining the trust of local communities and stakeholders, thus mitigating potential challenges as projects progress.

Furthermore, as global demand for clean energy solutions continues to rise, the timing of this venture is fortuitous. With the world increasingly prioritizing sustainable energy technologies and practices, the potential for long-term returns on investments in renewable energy is significant.

In summary, the partnership between DSSR and EDC represents a compelling investment opportunity within the rapidly evolving Indonesian energy sector. Should both parties effectively leverage their combined strengths, the potential for impactful developments, community progress, and environmental benefits stands to make this joint venture a model for future collaborations in the region.

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