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Pertamina Geothermal Energy Withdraws from Kenya's Suswa Project Amid Concerns Over Returns and Majority Stake

Pertamina Geothermal Energy Withdraws from Kenya's Suswa Project: A Strategic Pivot in International Expansion

In a significant development for the global geothermal sector, PT Pertamina Geothermal Energy Tbk (PGEO), the renewable energy arm of Indonesia's state-owned energy giant Pertamina, has officially withdrawn from its planned investment in the Suswa geothermal field in Kenya. Announced in late February 2026, this decision marks the end of a multi-year exploration of collaboration between PGEO and Kenya's Geothermal Development Company (GDC), a fully government-owned entity tasked with advancing the country's vast geothermal resources.

The news first surfaced prominently in Indonesian media, including Bisnis.com, where Pertamina New & Renewable Energy (NRE) President Director John Anis provided direct insight during an interview on February 26, 2026. He stated clearly: "After calculating based on what they offered and the available resources, we concluded that the investment was not good." This assessment followed thorough internal evaluations, including due diligence processes that began after initial agreements were signed years earlier.

The partnership traces back to September 2023, when PGEO and GDC entered into a non-disclosure agreement (NDA) to explore joint development opportunities at Suswa, located in Narok County within Kenya's geologically active Rift Valley. By 2024, momentum built with announcements of potential collaboration on the field, which holds an estimated resource potential of 100-300 megawatts (MW). PGEO had earmarked approximately US$200 million for development, aiming for a joint venture where the Indonesian firm would secure a majority stake a non-negotiable condition repeatedly emphasized by PGEO leadership.

Former PGEO CEO Julfi Hadi had publicly stressed this requirement during the Indonesia Africa Forum in September 2024, noting that the company "always requests single majority" ownership in international geothermal ventures. This approach aligns with PGEO's risk-averse strategy: geothermal projects demand massive upfront capital for exploration, drilling, and power plant construction, with long payback periods and exposure to geological uncertainties. Securing control allows better management of these risks and alignment with corporate goals.

However, the terms offered by GDC likely involving shared ownership, resource uncertainties after preliminary assessments, tariff structures, and  regulatory frameworks did not meet PGEO's economic thresholds. John Anis reiterated that Pertamina NRE only pursues investments with clear economic viability, adding, "We will look for other opportunities in more attractive locations." (However At Alphaxioms  we are certain  The African Rift has one of the most promising Geothermal Fields of All time ) .This selective stance reflects a broader shift in PGEO's international ambitions, prioritizing high-return prospects over expansive but lower-yield footholds.

Kenya remains one of the world's leading geothermal producers, with over 950 MW of installed capacity, primarily from the Olkaria complex operated by KenGen. The country boasts enormous untapped potential estimated at several gigawatts thanks to its position along the East African Rift. GDC has aggressively pursued exploration, including mobilizing drilling rigs from the Menengai field to Suswa in January 2026. This move signaled Kenya's commitment to accelerating Suswa independently, even without foreign partners like PGEO. Exploration drilling is now underway or imminent, positioning Suswa as GDC's third major operational field after Menengai and Baringo-Silali.

For Kenya, the withdrawal is a setback in attracting large-scale foreign direct investment and advanced Indonesian expertise in geothermal technology. PGEO brings proven capabilities from Indonesia's world-class fields like Kamojang, Lahendong, and Ulubelu, where it operates efficiently at scale. However, Kenya's geothermal sector continues to thrive through domestic efforts, international financing (e.g., from the African Development Bank), and partnerships with other players. Recent developments include interest from India in Nakuru and Baringo fields, and ongoing PPP models that have successfully developed Menengai phases.

From PGEO's perspective, the decision is pragmatic and aligns with its aggressive domestic growth targets. The company aims to increase installed capacity from around 672 MW to 1 GW in the coming years, and up to 1.7 GW by 2034, supporting Indonesia's energy transition under the national RUPTL plan, which targets a 76% expansion in new and renewable energy by 2034. Key ongoing projects include the 55 MW Lumut Balai Unit 3, collaborations with PLN for acceleration in Sulawesi and Sumatra, and social commitments in operational areas.

Internationally, PGEO is redirecting focus toward more promising markets. In early 2026, the company announced explorations for its innovative Flow2Max® technology, targeting an initial installation with the Philippines' Energy Development Corporation (EDC) by June 2026. This roadshow signals a pivot toward Southeast Asia and other regions offering better regulatory certainty, resource quality, and commercial terms. PGEO's strategy emphasizes becoming a "world-class developer" with a balanced portfolio, but only where projects deliver strong returns and strategic control.

This withdrawal highlights broader challenges in cross-continental geothermal investments. While Indonesia and Kenya both rank among top global geothermal nations, differences in investment climates, political stability, tariff regimes, and partnership structures can deter deals. Earlier optimism fueled by high-level MoUs during President Jokowi's 2023 visit to Kenya, which envisioned up to US$1.5 billion in geothermal and renewable deals did not translate into binding commitments. Critics at the time, including energy analysts, questioned the necessity of Indonesian investment abroad when domestic potential remains vast.

As of March 2026, no official statement from PGEO's website mentions the Kenya exit explicitly, but press releases focus on domestic milestones and Philippine opportunities. Petromindo, and other specialized outlets have covered the withdrawal extensively, confirming it as finalized rather than a mere signal.

Looking ahead, the Suswa project will proceed under GDC's leadership, contributing to Kenya's goal of expanding geothermal as a baseload clean energy source. For PGEO, this selective retreat strengthens its position as a disciplined player in a capital-intensive industry. Geothermal remains a cornerstone of the global energy transition reliable, low-carbon, and increasingly competitive but success demands rigorous economic scrutiny.


We won't say that We saw this coming in our intitial deep dives , The withdrawal of Pertamina Geothermal Energy from the Suswa project serves as a stark reminder of the intricate risk-reward calculus that defines international geothermal investments in East Africa. While Kenya's Rift Valley offers world-class resource potential reliable, high-enthalpy steam with baseload capabilities foreign players frequently encounter structural hurdles: stringent demands for majority stakes to justify the massive upfront capital and long gestation periods, evolving regulatory and tariff frameworks, community and land-related complexities, and sometimes underwhelming returns after exhaustive due diligence. Similar patterns have played out elsewhere in the sector GreenFire's scaled-back ambitions in Olkaria amid social and operational frictions, OrPower's strategic divestment of stakes to entities like Kaishan Group, ongoing procurement delays at KenGen, and protracted legal battles surrounding Menengai developments. These cases underscore a recurring truth: East Africa remains one of the planet's premier geothermal frontiers, yet success demands meticulous upfront risk proofing across geological, commercial, socio-political, and contractual dimensions. This is precisely where Alphaxioms steps in delivering unfiltered insights, scenario modeling, and strategic foresight to help developers, investors, and policymakers avoid resource-draining missteps and instead channel capital into truly bankable opportunities that align incentives for all parties involved.


This episode underscores a key lesson: international geothermal expansion thrives on mutual benefit, clear economics, and aligned incentives. As Africa rises as a geothermal powerhouse hosting events like the 2026 SPE Africa Geothermal Workshop in Nairobi and the landmark  World Geothermal Congress 2029 in the city Kenya's resilience and PGEO's pivot illustrate the dynamic, evolving nature of the sector.


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