By Raymond Hendriawan
Prajogo Pangestu, one of Indonesia's wealthiest businessmen, has masterfully diversified his energy portfolio, spanning upstream fossil fuel ventures, downstream petrochemicals, and an expanding footprint in renewable energy.
In Indonesia’s fast-evolving energy landscape, few names carry as much weight as Prajogo. Long known as a petrochemical tycoon through his flagship company, Chandra Asri Petrochemical (TPIA), Prajogo’s empire now extends well beyond fossil fuels. In 2023, he publicly listed two key energy firms: Petrindo Jaya Kreasi (CUAN), a coal mining operation now expanding into minerals like gold and copper, and Barito Renewables Energy (BREN), which manages a rapidly growing portfolio of geothermal and wind assets.
Together, these companies reveal a strategic duality: a deliberate balance between lucrative legacy sectors and promising green technologies. Rather than abandoning fossil fuels in favor of renewables, Prajogo has built a model that reflects the kind of pragmatic transition Indonesia itself must consider—where profitability and realism guide the path forward, not idealism.
Prajogo’s continued investment in fossil energy raises a compelling question: Is it a financial bridge to fund long-term ambitions in renewables, particularly geothermal? His strategy of leveraging cash-generating fossil businesses to underwrite expansion into cleaner energy could very well serve as a blueprint for Indonesia’s national energy transition.
Prajogo Pangestu family’s listed assets:
The dual-track model in action
Prajogo’s coal and petrochemical businesses (CUAN and TPIA) deliver steady cash flows from well-established business models. In contrast, Barito Renewables Energy (BREN) represents a long-term, capital-intensive play—but with notably lower risk.
Unlike many renewable ventures that struggle with high upfront costs and exploration risks, BREN pursues a risk-averse strategy: acquiring proven, operational assets. Its flagship subsidiary, Star Energy, became Indonesia’s largest private geothermal operator after acquiring Chevron’s Indonesian geothermal portfolio in 2017. This acquisition included major facilities in Salak (377 MW), Darajat (271 MW), and Wayang Windu (227 MW), all under long-term power purchase agreements (PPAs) with state-owned electricity firm PT PLN, significantly reducing revenue and development risks from day one.
This approach is particularly significant in geothermal energy, where greenfield development is notoriously expensive and risky. According to the International Renewable Energy Agency (IRENA), development costs range from $3 million to $5 million per megawatt, with exploration and drilling risks comprising up to 40% of total costs. For a 200 MW project, this translates to $600 million to $1 billion in capital—much of which could be lost if surveys fail. By acquiring already-operational assets, BREN bypassed those hurdles and went straight into revenue mode.
In 2023, BREN used the same playbook to acquire Sidrap Wind Farm, Indonesia’s first utility-scale wind project, through its subsidiary PT Barito Wind Energy. Located in South Sulawesi with a 75 MW capacity, the wind farm was already online and selling power under a 30-year PPA with PLN. Once again, BREN sidestepped construction delays and early-stage risks by acquiring a ready-made asset.
This acquisition-driven strategy has paid off. According to its 2023 financial disclosures, BREN generated IDR 5.5 trillion (approximately USD 350 million) in revenue with EBITDA margins exceeding 60 percent—a strong performance by global renewable standards. The stable, de-risked nature of these assets underpins this robust earnings profile.
BREN’s geothermal capacity now stands at 875 MW, with plans to expand to 1,200 MW by 2028. Its long-term PPAs with PLN insulate revenues from commodity price volatility, unlike coal, making the business both predictable and profitable.
A model for Indonesia’s energy strategy
BREN’s success suggests a new template for Indonesia’s energy transition: encourage the acquisition and expansion of existing renewable assets instead of relying solely on risky greenfield development.
Prajogo’s renewable push is not just diversification—it’s a replicable model. By aligning private capital, smart IPO timing, and disciplined acquisitions, BREN has turned geothermal—a sector often dismissed as slow and risky—into a reliable cash-generating business. This approach could help Indonesia meet its 17 to 19 percent renewable energy target by 2025 without compromising financial discipline.
A global shift toward pragmatism
Globally, energy transition strategies are becoming more grounded. In July 2024, BP withdrew from the Asian Renewable Energy Hub, a massive wind and solar-powered green hydrogen project in northern Australia. This came just two years after acquiring a 40.5 percent stake, highlighting growing skepticism around high-cost, long-payback renewable ventures.
Similarly, Shell has scaled back its hydrogen and offshore wind ambitions, such as the BlueScope project in Australia, and has refocused on core oil and gas operations. These moves signal a broader recalibration away from idealistic energy narratives toward financially viable, performance-driven strategies.
Indonesia must take note. With coal still providing 40 percent of its energy supply (as of early 2025, per IESR), an abrupt shift away from fossil fuels could jeopardize economic stability. Prajogo’s strategy offers a middle ground: continue leveraging fossil assets while systematically building out renewables through low-risk, high-return acquisitions.
Indonesia’s primary energy supply (source: IESR, 2025)
Synchronizing profit and transition
Prajogo Pangestu’s energy empire doesn’t represent a radical shift from coal to renewables. Instead, it exemplifies strategic synchronization—using profitable fossil operations (CUAN and TPIA) to fund the disciplined, de-risked growth of renewables under BREN. This approach reassures investors while creating a sustainable revenue engine to drive long-term green ambitions.
Far from being an outlier, Prajogo’s model reflects what many global energy giants are now embracing: a return to core fossil businesses to fund more measured, financially viable green growth. With players like BP and Shell retreating from overambitious hydrogen and wind ventures, it’s clear the future of energy will not be built on idealism alone. It will require strategic patience, capital discipline, and adaptive models.
Indonesia, facing one of the most complex energy transitions in the developing world, could benefit from this example. Rather than rushing to abandon coal or fossil fuels, the smarter path may be to adopt a dual-track strategy—using existing resources to fund and scale the future. In this, Prajogo Pangestu may not just be navigating the transition; he may be defining Indonesia’s most pragmatic roadmap forward.
