MAHKOTA GROUP (MGRO) CAN EARN MONEY FROM TURNING PALM OIL WASTE INTO ELECTRICITY
24 February 2020
Palm oil issuer PT Mahkota Group signed a definitive agreement with GREE Energy to develop the Medan Biogas Project, North Sumatra. Not only carrying out sustainable principles, MGRO can pocket profits from this stun project.
Launching information disclosure on the Indonesia Stock Exchange (IDX), Thursday (20/2), the Mahkota Group through its subsidiaries has signed two definitive agreements to develop biogas projects in Indonesia with GREE Energy at two palm oil mills.
The biogas projects will be connected to Indonesia's power company, PLN, each with a 20-year Power Purchase Agreement that is currently being developed.
Corporate Secretary of Mahkota Group, Elvi explained the investment value of the biogas project, according to data from GREE as an investor is around Rp 100 billion. “The form of cooperation is purely GREE as an investor who builds while from MGRO only provides gas taken from palm oil production waste,” he explained to Kontan.co.id, Monday (24/2).
The 3 MW biogas project will generate clean electricity and reach more than 27,000 people with 16 GWh of electricity generated per year.
The project seeks to mitigate the impacts of climate change through innovative solutions by reducing 76,000 tons of CO2 emissions per year, which is equivalent to the emissions of 42,000 people.
In addition, a total of 13,000 tons of BOD (biological oxygen demand) will be cleaned per year, equivalent to the domestic waste generated by 1,600,000 people.
Just so you know, these projects will contribute to the Mahkota Group's processing refineries in Riau, where it is suspected that the need for CPO will increase.
Elvi explained further, the cooperation scheme is that the electricity produced will be sold by GREE to PLN. Then, MGRO also gets a profit sharing with the highest percentage value of 8% which is adjusted to the electricity capacity produced.
In general, Elvi stated that the energy cost efficiency will be obtained by PLN as the buyer because the electricity production is environmentally friendly renewable energy.
The action taken by the Mahkota Group is in line with the implementation of sustainability principles in the palm oil sector, namely Indonesian Sustainable Palm Oil (ISPO).
CEO of PT Mahkota Group, Usli Sarsi hopes that this partnership will have a positive impact on society. “And contribute to reducing emissions, which is in line with our values in implementing ISPO sustainability standards,” he said in a written statement, Thursday (2/20).
In addition, Usli stated that this project can also provide benefits to the company's performance, namely increasing revenue.
GREE Energy founder Nicolas Stirer added that he was happy to partner with a large group like Mahkota. “With this project, it can help the Mahkota Group in transmitting more sustainable production,” he explained.
Nicolas stated that the construction of this biogas project could dramatically reduce greenhouse gas emissions from the two Mahkota Group factories. This partnership will also encourage the local economy and promote inclusive development and welfare in the villages around the project.