Fourth Partner and coal firm Indika Energy launch joint solar venture in Indonesia

Hyderabad-based developer Fourth Partner Energy today announced its foray into the Indonesian market by launching an integrated solar power company in partnership with the nation’s energy major Indika Energy. Like Fourth Partner Energy’s India portfolio, the joint venture company Empat Mitra Indika Tenaga Surya (EMITS) will offer integrated solar, storage and electric vehicle (EV) charging solutions to Indonesia’s commercial and industrial sector. 

Indika Energy will hold 51% stake and Fourth Partner Energy 49% in EMITS. The joint venture combines the experience of Fourth Partner Energy in building and operating over 550 MW in India and elsewhere, with Indika Energy’s engineering capabilities in bringing reliable energy solutions to the people of Indonesia. 

This partnership was facilitated by The Fourth Partner Energy’s impact investment arm, The Rise Fund, the majority shareholder in Fourth Partner Energy. 

When contacted by pv magazine, Fourth Partner refused to comment on individual investment in the venture but said EMITS would likely bring in at least $500 million into Indonesia in the next five years.

Vivek Subramanian, Co-Founder and Executive Director, Fourth Partner Energy, said the partnership with Indika Energy is a part of Fourth Partner Energy’s strategic international expansion into key markets across South East Asia. 

“The commercial potential for renewable energy in Indonesia is immense – the government aims to double its current share of clean energy and achieve nearly a quarter of its energy needs from renewables by 2025. Indonesia, like India, has a clear imperative towards aggressive decarbonization. EMITS is gearing up to play a vital role in enabling this transition through a simple value proposition to the consumer—cleaner electricity at lower rates than grid tariffs—to help meet their sustainability goals,” he added. 

Indika Energy brings its two decades of on-ground leadership to the partnership as an integrated energy player with robust clientele and strong financials. “Together with Indika Energy’s local regulatory expertise and our execution prowess, we are confident that EMITS will be Indonesia’s leading renewable energy solutions platform,” Vivek said. 

President director of Indika Energy, M. Arsjad Rasjid said EMITS is expected to contribute to Indika Energy’s efforts to increase revenues from the non-coal segment by 50% by 2025. “The joint venture is a manifestation of our commitment to diversify our business portfolios, achieve sustainability goals, improve our ESG performance, as well as support the Indonesian government’s efforts to achieve its renewable energy mix target of 23% by 2025,” he added. 

The Indonesian opportunity

Green energy sources are estimated to have accounted for 11.51%, or around 10,467 MW, of Indonesia’s total energy consumption at the end of 2020, according to data from the Directorate General of New and Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources (ESDM).

While this represents an increase of 2.3% compared to 2019’s figures, it falls short of the Ministry’s 13% goal for 2020. The Ministry of Energy and Mineral Resources projects that another US$ 36.95 billion in green energy investments will be required to achieve Indonesia’s target of 23% green energy usage by 2025. EMITS expects to bring at least US$ 500 million to Indonesia during this period.

This partnership was facilitated by Fourth Partner Energy’s impact investment arm, The Rise Fund – which is the majority shareholder in Fourth Partner Energy. With over $5 billion in assets under management, The Rise Fund is the largest private markets social impact fund globally. 

Fourth Partner portfolio

Apart from operations in Indonesia, Fourth Partner Energy is looking to expand its international presence in Sri Lanka, Bangladesh, Vietnam, Myanmar and Singapore. The company currently has an installed base of 550 MW solar capacity across the distributed and open access portfolios, with solar parks under construction in Uttar Pradesh, Maharashtra, Tamil Nadu, Chhattisgarh and Gujarat.

Fourth Partner Energy has also set up a 50:50 JV with leading commercial EV fleet operator, Lithium Urban Technologies in India to set up solar-powered EV charging infrastructure across the country. Charging Hubs across Pune and Gurugram have already been commissioned, while hubs across Mumbai, Hyderabad, Kolkata, Chennai and Jaipur are in the pipeline.