In a significant move toward sustainability and energy diversification, PT Alamtri Resources Indonesia Tbk (ADRO), through its subsidiary PT Adaro Clean Energy Indonesia (ACEI), has provided a loan of USD 4.1 million (approximately IDR 66.5 billion) to PT Karimun Sarana Surya (KSS). This financing aims to support the development of a renewable energy (EBT) project in the Karimun region of Kepulauan Riau. The agreement, signed on December 23, 2024, marks a crucial step in Adaro's commitment to transition into more sustainable energy solutions.

Adaro’s Strategic Shift Toward Renewable Energy

The move is part of ADRO's broader strategy to diversify its portfolio and reduce its dependence on coal-based energy. Adaro Clean Energy (ACEI), a subsidiary where ADRO owns a 99.99% stake, is tasked with leading the company’s efforts in the green energy sector. This investment is a clear indication of ADRO’s ambition to move beyond traditional coal mining and align with global trends toward sustainable development.

The financing, which comes with an interest rate tied to the Secured Overnight Funding Rate (SOFR) plus 1.70% annually, is intended to fund the development of renewable energy projects by KSS. With a maturity date set for December 31, 2025, the loan paves the way for further collaborations in the green energy sector.

Focus on Sustainable and Profitable Energy Solutions

ADRO’s management has expressed that this loan is the first in a series of financial actions aimed at expanding the company’s involvement in renewable energy. The company emphasized its goal of creating a more balanced business portfolio and becoming a key contributor to long-term value creation. By integrating green energy solutions into its business strategy, ADRO is positioning itself to compete more effectively in the evolving global energy market.

The company also aims to leverage innovative technologies and sustainable practices in the development of the KSS renewable energy project. As a result, the company anticipates that these projects will not only contribute positively to the environment but also offer high profitability and liquidity potential, which are essential for the long-term success of the business.

The Role of PT Karimun Sarana Surya (KSS)

KSS, one of the affiliates of ACEI, is the entity directly involved in the renewable energy project in the Karimun district. KSS is a company in which ADRO holds a significant indirect stake of 90.05%. With this financing, ACEI expects to play a critical role in the expansion of the renewable energy sector in Indonesia, particularly in Karimun, where the project will be developed.

ADRO’s Commitment to Green Financing

In alignment with global shifts toward sustainability, ADRO is actively pursuing green financing options to fuel its business transition. The company has also spun off its coal-related business into a separate entity, PT Adaro Andalan Indonesia Tbk (AADI), which has successfully gone public. This move was part of ADRO's broader strategy to expand access to funding, particularly through the growing demand for green and sustainable investment opportunities.

As part of its diversification efforts, ADRO is enhancing its commitment to renewable energy, ensuring its future competitiveness while also contributing to Indonesia's energy transition. This strategy is expected to play a pivotal role in driving economic growth, creating new jobs, and supporting the country’s sustainable development goals.

Conclusion: A Green Future for ADRO

This $4.1 million loan to KSS represents more than just an investment in renewable energy; it signals ADRO’s intent to be at the forefront of Indonesia's energy transformation. As the company focuses on renewable energy and green financing, it is positioning itself for future growth, innovation, and positive environmental impact. The collaboration between ADRO and KSS is a model for corporate sustainability and an example of how large corporations can contribute to Indonesia's shift towards more sustainable energy solutions.