Govt to form state firm to manage geothermal energy

The government will soon establish a new state-owned company to develop the country's huge geothermal potential resources.

The new company will be established by spinning of a geothermal subsidiaries of state owned oil and gas company PT Pertamina.

Pertamina's finance director Frederick Siahaan said in Jakarta Thursday that the spin-off was approved during Pertamina's shareholders meeting at Wednesday night.

In the first step, the government would take over the PT Geodipa Energi. As part of the deal, the government would take over the company's debts worth about US$460 million to Overseas Private Investment Corporation, he said, adding that the debts would be then converted into an equity in Geodipa which is currently 65 percent owned by Pertamina, and 35 percent by state-owned electricity company PT PLN.

As the result, Pertamina's ownership in Geodipa would be diluted to 3 percent, he said.

In the second stage, Pertamina's wholly-owned subsidiary PT Pertamina Geothermal Energy which operates 15 geothermal concession areas with potential geothermal electricity about 8,480 MW would also be included in the new state-owned company, he added. (godang)