Flooring Guide by Cinvex – JAKARTA – Indonesia finds itself strategically positioned amidst an escalating energy dominance rivalry between the United States (US) and China. This intense geopolitical dynamic is significantly shaping how foreign investors perceive Indonesia’s renewable energy (EBT) stock issuers, including prominent names like BREN, TOBA, and OASA.
Under former President Trump, the US has notably shifted back towards fossil fuels, particularly petroleum. In stark contrast, China is aggressively focusing its efforts on developing renewable energy. Both global powers maintain critical strategic energy collaborations with Indonesia, making the archipelago a crucial battleground in this energy transition.
Miftahul Khaer, a Research Analyst at Kiwoom Sekuritas Indonesia, emphasized that foreign investor sentiment towards Indonesia’s EBT sector is inextricably linked to the intricate US-China geopolitical landscape. “The substantial investment commitments from China clearly signal a stronger dominance compared to the diminishing promises of the Just Energy Transition Partnership (JETP), especially after the US, under Trump, withdrew its US$2 billion commitment,” Miftahul told Bisnis on Friday, September 26, 2025.
Delving into Indonesia’s partnerships with these two nations, 2023 saw nine Chinese companies ink agreements worth over US$54 billion with PLN for various clean energy projects. This commitment was further boosted by President Prabowo’s visit to Beijing in 2024, securing an additional US$10 billion in pledges.
Collectively, these Chinese commitments significantly overshadow the US$20 billion secured by Indonesia through the Just Energy Transition Partnership (JETP), an initiative signed in 2022. The JETP was established through collaborations between Indonesia and several developed partner countries, including the US, which had initially pledged to contribute US$2 billion. However, earlier this year, the US, under Trump’s leadership, formally withdrew from the JETP.
According to Miftahul, these unfolding geopolitical developments are prompting some foreign investors to foresee potential future dependency risks. Consequently, capital inflows into key EBT stocks such as BREN, TOBA, and PGEO have tended to stagnate. “The foreign net sell observed in these three issuers throughout 2025 can be interpreted as a reflection of this caution, despite Indonesia’s EBT sector retaining attractive long-term potential from a fundamental perspective,” he noted.
Market closure data from Friday, September 26, 2025, reveals significant foreign net selling. PT Barito Renewable Energy Tbk. (BREN) recorded a year-to-date foreign net sell of Rp193.14 billion. Similarly, shares of PT TBS Energi Utama Tbk. (TOBA) registered a foreign net sell of Rp17.16 billion, while PT Pertamina Geothermal Energy Tbk. (PGEO) saw a foreign net sell of Rp324.08 billion.
Conversely, other EBT issuers have experienced a different trend. PT Arkora Hydro Tbk. (ARKO) recorded a year-to-date foreign net buy of Rp6.90 billion, and PT Maharaksa Biru Energi Tbk. (OASA) achieved an impressive foreign net buy of Rp231.26 billion.
“Moving forward, we believe the escalating US-China rivalry could become an even more potent factor driving foreign capital. This implies that even if issuers like ARKO or OASA record foreign net buys due to more segmented narratives, the overarching direction of capital flows will, in our view, still be largely determined by the perception of geopolitical risk,” Miftahul asserted.
Despite the challenges, Miftahul views the intensifying energy dominance rivalry between the US and China as an opportunity. He suggests Indonesia could strategically balance cooperation with both blocs in the EBT sector. Should President Prabowo successfully navigate this delicate balance, Indonesia could re-emerge as a highly attractive investment destination, particularly given the substantial demand for clean energy investments projected until 2030.
The Indonesian government estimates the nation’s clean energy investment needs to reach an astounding US$97 billion by 2030. Foreign investment is deemed critical, as Indonesia’s nascent solar and wind power sectors currently contribute a mere 0.24% to the total national energy mix, starkly contrasting with contributions of 3.8% in the Philippines or 13% in Vietnam.
“From a stock perspective, we maintain that BREN and PGEO remain prospective for the long term, buoyed by solid project portfolios. However, short-term volatility is expected to remain high, tracking global tensions. We issue a ‘hold’ recommendation for BREN with a target of Rp9,400, and a ‘trading buy’ for PGEO with a target of Rp1,415,” Miftahul concluded.
Disclaimer: This news article is not intended as an invitation to buy or sell shares. Investment decisions rest solely with the reader. Bisnis.com is not responsible for any losses or gains arising from the reader’s investment decisions.
Summary
Indonesia is strategically positioned amidst an escalating US-China energy dominance rivalry, significantly influencing foreign investment in its renewable energy (EBT) sector. While China has made substantial commitments totaling over US$64 billion for clean energy projects in Indonesia, the US, under Trump, withdrew its US$2 billion pledge from the Just Energy Transition Partnership (JETP). This geopolitical dynamic has led to investor caution and foreign net selling in key EBT stocks such as BREN, TOBA, and PGEO throughout 2025 due to perceived dependency risks.
Despite some EBT issuers experiencing foreign net buys, the overarching direction of capital flows is largely determined by geopolitical factors. Analysts suggest Indonesia can leverage this rivalry by strategically balancing cooperation with both blocs. This approach could re-establish Indonesia as an attractive investment destination, particularly given its estimated US$97 billion clean energy investment needs by 2030 and the current low contribution of solar and wind to its national energy mix.