Report of the Board of Commissioners
Dear shareholders and stakeholders,
Praise be to God Almighty for the company's success in passing the business journey well in 2022, in the midst of economic conditions that are starting to move slowly after being affected by the Covid-19 pandemic. Before covid-19 hit various lines of slowing economy which made the mining and renewable energy industries corrected their growth and development.
During 2022, the Board of Commissioners has carried out the duties and responsibilities mandated in carrying out the supervisory function of the implementation of the Board of Directors' duties in managing the company. The Board of Commissioners has also ensured that in carrying out its operational activities, Terregra has referred to the established business plan, and has even implemented business strategies adapted to new and renewable energy market conditions, and ensured compliance with all applicable laws and regulations.
Through this 2022 annual report, allow the Board of Commissioners to submit a report on work duties and supervisory responsibilities of the Company in line with the direction of the GMS and the Company's Articles of Association which are realized through various activities during 2022. In this report, the Board of Commissioners also conveys an assessment of business performance, the performance of the Board of Directors in managing the Company and the Company's Business, Business Prospects during 2022 and the implementation of governance in the corporate environment.
The Company's Business Strategy During the Pandemic 2022
We all see and know together that in 2022, even though covid-19 has begun to slow down, the impact is still being felt. This is a big challenge for Terregra to be able to quickly rise from the correction of business growth.
Starting to improve people's purchasing power, the business industry that is starting to grow and starting to move investment, will become the momentum of the company's movement according to the corre business in the renewable energy industry.
To maintain the momentum of covid-19, the company remains committed to continuing to grow by implementing several business strategies. The company conducts policies in a tactically responsive manner, including emphasizing performance and selection of quality projects while still optimizing existing projects. In 2022, the company is also still implementing health protocols, the company has also advocated a healthy clean lifestyle (PHBS) in the family and work environment and avoided workplaces that have the potential to cause crowds and wear masks towards new living conditions. The creation of a safe occupational health environment will result in good, precise and optimal work operational continuity.
The Board of Commissioners assesses that in 2022, the Terregra Board of Directors has carried out their duties with discipline and compliance and obeys the government's recommendations. The Board of Commissioners also appreciates the performance of the Board of Directors who have made business performance run well and consistently as it should be and remain enthusiastic about working to meet the demands of existing targets. The company still exists in activities despite the relatively tough challenges.
The responsibility of the Board of Commissioners to Submit Reports
In accordance with the Financial Services Authority (OJK) Regulation Number 29 / POJK.04 / 2016 concerning the Annual Report of Issuers or Public Companies as well as the Circular Letter of the Financial Services Authority Number 30 / SEOJK / 04/2016 and the Company's Articles of Association (Statement of Meeting Resolutions on Amendments to the Articles of Association) at the end of each Financial Year, the Company is obliged to make an Annual Report. where the provision requires each company to submit a Report of the Board of Commissioners in accordance with the form and content as well as other requirements based on the applicable provisions and regulations.
Renewable Energy Industry Conditions in 2022
New and Renewable Energy (NRE) is increasingly strategic for the world economy as it develops globally, reducing the impact of climate change and maintaining energy security. Therefore, the government continues to strive to accelerate the development of NRE in order to achieve the mix target and Net Zero Emission / NZE while encouraging investment in NRE development.
NRE generation from year to year continues to experience development, as well as in 2022, the NRE business climate continues to grow in line with market demand. Therefore, to provide support for improving the energy business climate in Indonesia, the government is accelerating the development of NRE plants so that the NRE mix target of 23% in the national energy mix by 2025 is achieved. Based on data from the Ministry of Energy and Mineral Resources (ESDM), from the target portion of NRE growth of 23% in 2025 and 31% in 2050, realization in 2020 has only reached 11%, but the potential for the future is still wide open.
The government encourages the use of NRE, where potentially Indonesia can reach 400 Giga Watt (GW) but the usage is only 2.5%. Moreover, Indonesia has a very large NRE energy ranging from the largest source of energy from solar, sources from wind, sources from water / hydro and also has sources from bioenergy. For Geothermal, Indonesia's total geothermal potential is more than 400 GW and the implementation in 2020 reaches 176 MW. For Solar plants, there is an additional 11 MW for rooftop solar panels. For wind and hydro potentials have the same potential, which is 150 GW.
President Jokowi during the G7 Summit working lunch session on the topic of climate change, energy, and health in Elmau, Germany, Monday (27/6/2022) said that Indonesia needs at least US$25 to US$30 billion for the energy transition for the next eight years. This transition can be optimized as a motor of economic growth, opening up business opportunities, and opening up new jobs.
Data from the Directorate General of New Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources informed that in 2020, investment realization in the NRE subsector reached USD1.36 billion or around IDR 19.1 trillion (exchange rate of 14,078 per US dollar), smaller than the 2020 investment target of USD2.02 billion. Overall from the government's record, the investment achievements are as follows; for energy conservation the target is USD8 million, reaching USD8 million. As for bioenergy, an investment of USD108 million was achieved from the target of USD420 million, Aneka EBTKE was achieved according to the target of USD540 million and for geothermal it reached USD702 million from the target of USD1,050 million.
The development of NRE combines all potentials, capacities and also the economic side. In the next five years, Indonesia will have a total of about 9 GW of renewable energy from Hybrid, Wind, Hydro, Geothermal and Bioenergy power plants.
The business prospects in 2023 actually refer to the Company's Work Plan and Budget (RKAP) 2022 and the business targets that have been set and compared with the 2021 Prognosis. Where in realizing the business prospects in 2022, companies can also see the situation and working conditions such as realizing business targets in 2021 so that business prospects in 2023 can be studied from risk analysis of the implementation of the 2022 RKAP including evaluating business opportunities and challenges.
In the midst of economic conditions that are still not fully recovered due to uncertainty and the decline of Covid-19, the Board of Commissioners assesses that the performance of the Terregra Board of Directors throughout 2022 has shown excellent performance. The Board of Commissioners sees that the strategies and work plans prepared by the Board of Directors have paid attention to what are the strengths and shortcomings of the company so that it is carried out on target and in accordance with the flow. This improvement in business performance will provide high optimism for sustainable business growth in the future.
The Board of Commissioners views that Terregra needs to continue to strengthen its strategy by improving operational efficiency and customer satisfaction, increasing revenue growth to optimize business development funding, increasing strategic partnerships and product marketing and strengthening the readiness of the number or capacity and competence.
Finally, the Board of Commissioners appreciates and expresses its gratitude to the Board of Directors for their dedication so that Terregra can successfully go through a challenging 2022. We would also like to express our gratitude to all levels of Terregra leaders and employees who have worked hard together to advance the company.
To the business partners, we also thank you for the support and trust that has been given so that Terregra managed to record a good performance. The Board of Commissioners also expresses its highest gratitude to the Shareholders, Regulators and all stakeholders who have provided support.
Hopefully, this well-established cooperation can continue to be improved in the future.
Jakarta, 28 April 2023