Waskita, Terregra Shares Jump to Year-Highs After Signing $899m Deal for Sumatra Renewable Projects

Jakarta. State-controlled construction company Waskita Karya has agreed to build seven hydroelectric power plants for Terregra Asia Energy, a Jakarta-listed renewable energy company, in a deal worth $899 million, pushing the companies' share prices to new highs in a year on Wednesday. 

Under the master agreement signed on Dec 11, 2020, Waskita would build two hydroelectric power plants in Aceh with a total capacity of 467 megawatts and five micro-hydropower plants in North Sumatra, with a total capacity of 43 megawatts.

Waskita Karya's senior vice president for engineering, procurement, and construction division said in a statement on Tuesday that the constructor would involve in the engineering, procurement, and construction stage of the seven power plants and estimated the cost would be around Rp 12.5 trillion ($899 million). 

Terregra's shares rose as high as 32 percent to trade at Rp 258 per share in the first trading session at Indonesia Stock Exchange on Wednesday. That was the share's highest price since Nov 20, 2019.  The share has been rising by 106 percent in the past month. 

Waskita's shares, on the other hand, rose as high as 6.9 percent to 1,610, its highest since Jan 3 last year. 

Daniel Tagu Dedo, Terregra's finance director, said the company considered domestic banks or financial institutions to finance the project or issuing new shares to pool funds from investors. 

"The corporate action being prepared by Terregra Asia Energy is a rights issue and the issuance of green bonds," Daniel said. 

State utility company Perusahaan Listrik Negara (PLN) has signed a power-purchase agreement with Terregra for the five micro-hydropower plants in Aceh, Daniel said. Meanwhile, the company had only completed a feasibility study and secured location permits for the projects in Aceh. 

The company targeted to start commercial operation for North Sumatra's projects in two years and Aceh projects in three years. 

Djani Sutedja, Terregra's president director and one of the company's founders, said Terregra has committed to help Indonesia meet its target to source 23 percent of its energy need from renewable sources by 2024.  

"Indonesia has tremendous renewable energy potential, including from rivers, sun, wind, and biomass. Terregra Asia Energy will continue to carry out research and development to make a meaningful contribution to meeting the needs for renewable energy in Indonesia," Djani said.