Ormat Increases Geothermal Investment in Indonesia
Global geothermal company Ormat Technologies is expanding its investment in Indonesia. This is in line with strengthening renewable energy projects domestically, including the management of the Telaga Ranu Geothermal Working Area (WKP) with a capacity of 40 MW in West Halmahera, North Maluku.
The assignment is based on the Ministry of Energy and Mineral Resources Decision Number 8.K/EK.04/MEM.E/2026. This is part of the government’s pursuit of net-zero emissions by 2060 through the development of geothermal-based clean energy.
According to Riki Ibrahim, senior lecturer at the Master’s Programme in Renewable Energy at Darma Persada University, the public should view geothermal industry developments objectively. “Ormat’s investment is increasing, and the geothermal industry is becoming more innovative and competitive,” he said.
Lucien and Yehudit Bronicki founded the company by developing Organic Rankine Cycle (ORC) technology in 1965. This technology is now used in various geothermal power plants worldwide, including in Indonesia.
In 2004, Ormat’s subsidiary in the United States was officially listed on the New York Stock Exchange under the code ORA. The corporate structure was simplified in 2015 after Ormat Technologies acquired its own parent company.
A significant change occurred in May 2017 when ORIX Corporation acquired the combined shares of Ormat’s two largest shareholders worth US$627 million, or approximately Rp 9.78 trillion (at the exchange rate of Rp 15,600 per US dollar). However, by 2026, ORIX’s ownership had shrunk to between 0.62 per cent and 4.92 per cent. The largest shareholding was instead held by two global investment institutions from the United States, namely BlackRock and Vanguard.
BlackRock holds approximately 11.47 per cent to 14.67 per cent of shares, whilst Vanguard holds approximately 9.07 per cent to 9.99 per cent. Overall, approximately 95.49 per cent of Ormat’s shares are now controlled by global financial institutions.
Geothermal Project Expansion
Ormat Technologies operates more than 200 energy projects with a total capacity of 3.2 GW in various countries. In Indonesia, PT Ormat Geothermal Indonesia (OGI) is involved in several geothermal projects including Sarulla with a capacity of 330 MW which began operating in 2017, as well as the Gunung Salak and Ijen projects with capacities of 15 MW and 35 MW respectively, which began operations in 2025.
Besides providing ORC technology, Ormat also acts as a geothermal developer in Indonesia, demonstrating a long-term investment commitment to the nation’s renewable energy sector.
Riki believes that the establishment of an Ormat factory in Indonesia should be encouraged to increase investment and technology transfer in the geothermal sector. This step has the potential to increase the local component content ratio (TKDN) and reduce technology costs to make them more competitive compared to flash condensing technology in the development of geothermal power plants in Indonesia.
By way of illustration of how Ormat is expanding its foothold in Indonesia, collaboration with domestic partners has continued throughout 2025.
Ormat Partners with Archi to Develop Geothermal in Bitung
One example of this expansion is the partnership between PT Ormat Geothermal Indonesia and PT Archi Indonesia Tbk (ARCI) in developing a geothermal project in Bitung, North Sulawesi. ARCI, previously known as a gold mining company, is entering the renewable energy sector as part of a long-term diversification strategy since 2024.
The geothermal management licence was granted to PT Toka Tindung Geothermal (TTG), a joint venture formed by ARCI together with PT Ormat Geothermal Indonesia on 13 June 2025. Through this entity, the project is targeted to produce 40 megawatts (MW) of geothermal electrical power.
Archi Indonesia Chief Executive Officer Rudy Suhendra emphasised that this step is the foundation for the company’s clean energy expansion. “This is an important first step for our clean energy diversification,” said Rudy in a public presentation at Rajawali Place, Jakarta, on Thursday 19 June 2025.
After obtaining the licence, TTG is targeting swift acquisition of environmental approval and will continue the exploration phase to confirm geothermal resources and reserves in the concession area. In this project, Ormat acts as a strategic partner in technical and development aspects.
According to Archi Indonesia Chief Financial Officer Hidayat Dwiputro Sulaksono, coordination with Ormat is continuing, particularly in budget formulation and project execution. “For our geothermal activities, we must coordinate with Ormat regarding the budget and so forth,” he said in Jakarta on Thursday 19 June 2025.
In 2025, ARCI allocated capital expenditure of US$80 million, or approximately Rp 1.25 trillion (at the exchange rate of Rp 15,600 per US dollar), lower than the 2024 realisation of US$91.8 million, or approximately Rp 1.43 trillion. The majority of 2025 capital expenditure was focused on exploration and development of underground mining, as preparations continue for the geothermal project with Ormat in Bitung.