Managing Asia

Managing Asia

Indonesia’s Sintesa Group wants to be a leader in renewable energy

Reporting by Christine Tan | Writing by Aza Wee Sile
The journey of an Indonesian female CEO

Indonesian conglomerate Sintesa Group has a finger in many pies, but it is now aiming to be a leader in green energy as Indonesia steps up efforts to enhance its electricity generation capacity.

The Sintesa Group, which has its headquarters in Jakarta, owns several companies in the consumer products, real estate, industrial and energy sectors. The company currently operates a 110MW gas and steam-powered plant in South Sumatra as an Independent Power Producer (IPP). It is also developing a 100MW geothermal power plant in Banten, the westernmost province of Indonesia's Java island.

According to the company's chief executive, renewable energy is a key area of focus, with the government also placing greater emphasis on green sources.

"Right now, we're [involved] more in gas and geothermal but we know we need the technology so we are partnering with foreign parties," said Shinta Widjaja Kamdani, CEO of Sintesa Group.

Shinta Widjaja Kamdani, CEO of Sintesa Group.
Photographer | Collection | Getty Images

"For renewable energy, my target is to reach 1,000 megawatts by 2020," said Kamdani, estimating the investment to cost more than $1 billion. A megawatt (MW) is one million watts, and generally used to measure the output of a power plant.

Last year, Indonesia's government announced ambitious plans to build 35,000 MW of new generation capacity during President Joko Widodo's five-year presidential term.

Indonesia's electricity generation capacity growth hasn't kept pace with demand, and this often leads to power shortages and a low electrification ratio, according to the U.S. Energy Information Agency (EIA).

Indonesia, which is made up of 17,000 islands, also faces the geographical challenge of supplying energy.

The 35,000 MW power project initiative is being led by the state-owned PLN, which will develop 10,000 MW of the new electricity capacity, while the remaining 25,000MW will be developed by private developers.

The government has also set a quota for the new targets based on the source: Renewable energy will encompass 25 percent, gas will be 25 percent and coal making up the balance, said Kamdani.

Why Indonesia stands out as a bright spot

As Indonesia's policymakers begin to pay more attention to green energy, Kamdani believes it is an opportune moment for Sintesa Group.

However, challenges remain for the Indonesian CEO, who is also an adviser to Indonesia's Vice President H. Muhammad Jusuf Kalla.

"There is still a lot of red tape for renewable energy," she said. "I think because renewable energy is still very new, the regulatory aspect needs to be [re-looked at]."

The EIA in its report also said that Indonesia's inadequate supporting infrastructure, difficulty in obtaining land-use permits, subsidized tariffs and an uncertain regulatory environment all contribute to insufficient electricity generation.

One of Kamdani's recommendations is that the government ought to consider giving incentives to green businesses, because certain aspects of environmentally-friendly businesses can be very costly.

"I think renewable energy is definitely the future," said Kamdani.