Abu Dhabi’s Masdar has formed a joint venture with Indonesia’s Mitrabara to provide renewable energy solutions to the fast-growing commercial and industrial sectors in the South-East Asian country.
The PT Masdar Mitra Solar Radiance joint venture will help customers to reduce their carbon footprint, Masdar said. It will operate under the Solar Radiance brand.
“As both international and domestic customers in Indonesia require more and more competitive and renewable energy in order to meet their own emission reduction targets, we look forward to working with Mitrabara on serving this market segment and to further expanding our presence within the country and the region at large,” said Fawaz Al Muharrami, acting executive director of clean energy at Masdar.
Indonesia, the largest country in South-East Asia, is planning to generate at least 51 per cent of the total energy from renewable sources by 2030. The country also aims to become carbon neutral by 2060 or sooner, with renewable energy providing up to 85 per cent of the energy mix by that date.
“With the growing need for companies to reduce their carbon footprint, availability of renewable energy has become one of the key drivers for investment decisions,” Khoirudin, chief executive of Mitrabara, said.
“Indonesia unfortunately is lagging behind our peers in the region for this issue. We believe that Solar Radiance will be able to accelerate the implementation of solar energy solutions in Indonesia, especially since solar energy is an abundant resource that is still underutilised.”
Masdar is already active in Indonesia. In 2020 it formed a joint venture with PT PJBI, a subsidiary of Indonesia’s state electricity company, to develop the country’s first floating solar project, which is also one of the largest in the world. Masdar announced the financial close on the project last August and it is expected to begin commercial operations in the fourth quarter this year.
The company also plans to develop renewable power in Indonesia for export to Singapore and signed a pact with Singapore’s Tuas Power, France’s EDF Renewables and PT Indonesia Power to develop solar photovoltaic plants with a capacity of up to 1.2 gigawatts, with the potential to build associated storage in Indonesia.
Masdar's new pact also comes after the UAE and Indonesia signed agreements worth billions of dollars during the visit of Indonesian President Joko Widodo to the UAE last November.
The countries are looking to triple trade over the next four years, from $2.5 billion in 2020, as relations strengthen.
Government and private sector entities signed deals in sectors that include energy, aviation, financial services, artificial intelligence, agriculture and defence. Deals valued at about $10bn were signed with Indonesia’s sovereign wealth fund.
“The UAE and Indonesia share common goals on climate action and diversification of the energy mix, and a vision of a greener, more sustainable future,” Abdulla Al Dhaheri, Ambassador of the UAE to Indonesia and the Association of Southeast Asian Nations, said. “This joint venture represents a step toward achieving those objectives and delivering sustainable economic growth.”
Masdar, which is wholly-owned by Mubadala Investment Compay, is currently active in more than 30 countries, including the UAE, Jordan, Saudi Arabia, Mauritania, Egypt, Morocco, the UK and the US, among others. Abu Dhabi National Oil Company and Taqa are set to become shareholders in the company in the coming months.