Report of the Board of Commissioners
Dear Shareholders and Stakeholders,
During 2023, the Board of Commissioners and Directors held 4 (four) coordination meetings; namely: in May, June, August and October 2023. The meeting agenda includes:
- In May 2023, the fundraising process with Carbon Resilience Pte Ltd Singapore will be discussed; Status of 3 PLTM that will be financed; fundraising opportunities from several domestic strategic partner candidates;
- In June 2023 the meeting agenda includes: directors’ report on the progress of negotiations with domestic investor candidates; termination of financial consultants related to fundraising financing from Carbon Resilience Pte Ltd; as well as plans to appoint a Financial Consultant and Underwriter for the Bond issuance; Planned MOU with UNDP in preparing the Green Bond Framework.
- In August 2023, the agenda includes: directors’ report on the progress of the company’s project financing fundraising efforts; corporate action plans in the context of strengthening capital through the Stock Exchange; restructuring the company in the context of efficiency.
- In October 2023, the meeting agenda includes: extension of the Electricity Purchase Agreement (PJBL) for several of the company’s PLTMs with PT PLN UID North Sumatra; Development of Financing Efforts; other agenda.
Assessment of Directors' Performance
Based on communication, observations and coordination meetings held between the Board of Commissioners and the Board of Directors, the Board of Commissioners assesses that the Board of Directors has carried out its duties and exercised its authority well for the progress of the company.
The Board of Commissioners assesses that there are increasingly better opportunities for the company’s business prospects, which focus on providing electricity generation sourced from new, renewable energy, and especially currently the company’s focus is hydro power plants.
The Board of Commissioners provides recommendations in the form of suggestions to the Board of Directors for selecting alternative funding for company projects that are most profitable for the company, taking into account the limited time available and the most efficient funding scheme.
From the external aspect, especially regarding the Indonesian Government’s policy to support the creation of a renewable energy development ecosystem, this has been proven by the inauguration of the “Indonesian Carbon Exchange” (IDXCarbon), on September 26 2023 by the President of the Republic of Indonesia Joko Widodo.
The business license for the Carbon Exchange Organizer has been granted to the Indonesian Stock Exchange (BEI) by the Financial Services Authority (OJK) through Decree number KEP-77/D.04/2023 on 18 September 2023.
The Indonesian Carbon Exchange has also been equipped with OJK Regulations (POJK) Number 14 of 2023 concerning Carbon Trading through the Carbon Exchange. This development is very positive for the company’s future business prospects, especially when several of the company’s PLTM projects are operational, so the company can contribute to trading on the Indonesian Carbon Exchange.
IDXCarbon management has invited TERREGRA management to socialize the Trading Mechanism and Regulations on the Indonesian Carbon Exchange.
Therefore, the Board of Commissioners encourages the company’s Directors, as well as Directors and Commissioners in subsidiaries, to accelerate the process of developing the company’s PLTM, especially the 5 (five) PLTM with a total capacity of 48.9 Megawatts, which already have a PJBL with PT PLN (Persero) UID Sumatra North, so that it can create adequate income for the company, contribute to the Indonesian Carbon Exchange, and increase share prices and provide returns for the company’s shareholders.
Conditions of the EBT Industry
Throughout 2023, based on a press release from PT PLN (Persero), it is informed that PT PLN (Persero) will continue to accelerate the development of New Renewable Energy (EBT) to support the energy transition agenda in Indonesia. As a concrete form, in 2023 PLN will have completed 28 new EBT generators, a “dedieselization program” with the construction of transmission networks and distribution networks and the development of green hydrogen.
One of the most phenomenal energy transition efforts is the inauguration of the Cirata floating solar power plant (PLTS) project with a capacity of 192 Megawatt peak (MWp) on November 9 2023. The largest floating solar power plant in Southeast Asia is a form of collaboration between PLN and an energy company from the United Emirates. Arabic (UAE), Masdar.
Apart from the Cirata floating PLTS, throughout 2023 PLN will also inaugurate 27 other EBT plants with a total capacity of 344 Megawatts (MW) which will contribute positively to energy transition efforts.
According to information published on January 5 2024, the 27 EBT plants consist of hydro-powered plants such as the Besai Kemu mini hydro power plant (PLTM) (8.84 MW), PLTM Sukarame (7.4 MW), PLTM Krueng Isep Expansion (10 MW), PLTM Sisire Simandame (4.6 MW), PLTM Lintau 1 (4.64 MW), PLTM Lintau 2 (4.64 MW), PLTM Anggoci ( 9 MW) PLTM Tongar (6.48 MW), PLTM Aek Sigeaon (3×2 MW), PLTM Aek Sibundong (4×2 MW), PLTM Bayu (3.6 MW), PLTM Cibuni (3.2 MW), PLTM Kanzy 1 (3 MW), PLTM Cileunca (1.09 MW), PLTM Sumberarum 1 (3.4 MW), Pageruyung micro hydro power plant (4.4 MW), and hydroelectric power plant (PLTA) Batu Gajah (7.5 MW).
Also solar power plants such as the Sepangkur Besar solar power plant (PLTS) (0.075 MW), PLTS UP3 Gresik Gili Noko (0.05 MW), PLTS Saular (0.025 MW), PLTS Saibus (0.1 MW), PLTS Sadulang Besar (0.1 MW) and Kemirian PLTS (0.05 MW).
PLN also inaugurated Geothermal Power Plants (PLTP), namely PLTP Sorik Marapi (39.6 MW) and PLTP Sokoria 2 (5 MW), as well as other green energy plants such as the Ujung Batu Biogas Power Plant (PLTBg) (3.9 MW) and the Surakarta Waste Power Plant (PLTSa) (8 MW).
PLN has also inaugurated 21 Green Hydrogen Plant (GHP) units on November 20 2023 which are capable of producing up to 199 tons of hydrogen per year.
The 21 PLN GHP locations are located at; steam power plant (PLTU) Pangkalan Susu, PLTU Suralaya 8, PLTU Suralaya 1-7, PLTU Labuan, PLTU Lontar, PLTU Pelabuhan Ratu, PLTU Indramayu, PLTU Tanjung Jati B, PLTU Rembang, PLTU Tanjung Awar-Awar, PLTU Paiton, PLTU Pacitan, PLTU Adipala, gas and steam power plant (PLTGU) Muara Karang, PLTGU Cilegon, PLTGU Tanjung Priok, PLTGU Muara Tawar, PLTGU Tambak Lorok, PLTGU Gresik, PLTGU Grati, and gas power plant (PLTG) Pemaron.
PLN will run the Accelerated Renewable Energy Development (ARED) scenario which will increase NRE generating capacity by 75% and gas-based generating capacity by 25% until 2040. With this scenario, it is hoped that Indonesia can achieve the net zero emissions (NZE) target in 2060 or later fast. The ARED scheme was also presented at the United Nations Climate Change Conference (COP28) Global Forum in Dubai, UAE which was held on 30 November – 13 December 2023. This was done to establish international collaboration. This collaboration is important, considering that the energy transition in the country is still facing many challenges.
Based on the development progress of PT PLN (Persero) 2023 EBT projects as stated above, the company’s business is very prospective. With the total project capacity owned by the company, namely: 510.8 Megawatts (or 39% of Indonesia’s total energy transition target, 1,750 Megawatts), it is certainly quite strategic.
Of the seven projects owned, 5 mini hydro power plants of which have a total capacity of 49.8 Megawatts and have a Power Purchase Agreement (PPA) with PT PLN (Persero), and 2 large hydro power plants with a total capacity of 467 Megawatts have been registered in PT PLN (Persero) RUPTL (General Plan for Electricity Supply) 2021-2030.
Closing
The Board of Commissioners motivates the Board of Directors so that by 2024, at least 1 out of 5 projects that already have PJBL have been built and will be followed up with further projects.
Finally, we would like to express our thanks to all TERREGRA leadership and employees who have worked hard together to advance the company. To our business partners, we also express our gratitude for the support and trust they have given. The Board of Commissioners also expresses its highest thanks to Shareholders, Regulators and all stakeholders who have provided support.
Hopefully this well-established collaboration can continue to be improved in the future.
Jakarta, May 29 2024
