Phase 3 · Step 1 — Investment Narrative Spine

Coherent investment narrative integrating the project's structural facts, source documents, and computed financial outcomes. Revised 2026-05-16.

1. The investment thesis

Indonesia has just changed the rules on its municipal organic waste. A 2025 regulation, Perpres 109/2025, replaced the prior incineration-first regime with a non-thermal requirement for wet and organic feedstock. The country now has a regulator-created market for waste-to-biomethane with zero operating capacity to serve it — Malaysia has three operating plants, Indonesia has none. The platform raises USD 40 million of CAPEX (USD ~13 million of equity from a single Limited Partner plus USD ~30 million of senior debt) to deploy the first three plants into that market, returning a portfolio Project IRR of 26.2 percent and Equity IRR of 55.9 percent over a twenty-five-year concession.

2. The opportunity

The platform consists of three Special Purpose Vehicles, each in a different Indonesian region and each owned by a dedicated local entity. Together they process roughly 1,165 tonnes per day of organic feedstock — 915 from municipal sources and 250 from animal feedstock, which boosts biogas yield three to five times per tonne. Each plant outputs Compressed Bio-Methane Gas at pipeline specification, sold under firm long-term offtake at USD 15 per MMBTU to PGN, Pertamina, or other qualified gas buyers.

The three SPVs sit at PD Pasarjaya in Jakarta (390 tonnes per day organic = 315 MSW + 75 animal, USD 11 million CAPEX, October 2026 award), Bandung at Sarimukti (425 tpd = 350 MSW + 75 animal, USD 15 million, April 2027 award), and Lampung Selatan at TPA Lubuk Kamal (350 tpd = 250 MSW + 100 animal, USD 14 million, October 2027 award). Award dates are six months apart by design — the staggered sequence means the investor never sees all three plants in peak construction simultaneously, and the first plant begins generating cashflow in October 2029 while the other two are still under construction.

Each plant runs Covered Lagoon Anaerobic Digestion technology — the same configuration as the operating bio-methane plant in Penang, Malaysia. The Penang plant has been running for years on a comparable feedstock mix and supplies the operating data anchor for utilization, biogas yield, parasitic load, and OPEX scaling at all three Indonesian sites.

The regulatory context is supportive across the board. The PMK 130/2020 tax holiday grants a five-year corporate-tax exemption at 100 percent for renewable-energy infrastructure of this CAPEX scale — all three plants qualify. The Omnibus Law and OSS one-stop permitting system streamline the licensing process. Local-government in-kind support sits at every site: Kota Bandung contributes the Materials Recovery Facility and a 20 percent tipping-fee share (USD 5 per tonne to the SPV; 80 percent retained by Kota Bandung to fund the in-kind MRF and program oversight); the Lampung Selatan regency contributes road infrastructure; PD Pasarjaya as a regional state-owned authority aggregates feedstock from 153 traditional markets and bears feeder-truck logistics.

3. The returns

The portfolio delivers a Project IRR of 26.2 percent and an Equity IRR of 55.9 percent at base case, both well above the 15 percent and 20 percent targets. The picture is more even across the three plants than under the original v02 build. PD Pasarjaya is now the strongest SPV at Project IRR 30.9 percent and Equity IRR 65.6 percent, lifted by the addition of 75 tonnes per day of animal co-digestion alongside the high-purity 315 tpd MSW organic stream sourced from the BUMD's 153 traditional markets. Bandung sits at Project IRR 25.1 percent and Equity IRR 52.7 percent — scale (425 tpd organic), animal co-digestion, and the calibrated 20 percent tipping-fee share combine for a 61 percent EBITDA margin. Lamsel comes in at Project IRR 22.5 percent and Equity IRR 46.6 percent, lifted by 100 tpd animal co-digestion that takes advantage of the regency's established dairy and poultry catchment.

Debt service coverage clears the covenant floor with substantial headroom across the portfolio. Minimum DSCR over the 22-year operating life is 3.39 times at Lamsel — 2.6 times the 1.30-times floor that project-finance lenders typically require. Portfolio minimum DSCR is 3.60 times; portfolio average DSCR 4.17 times. Pasarjaya and Bandung sit higher (4.74 and 3.80 times minimum respectively), with Lamsel as the marginal SPV but still well clear of every covenant.

Peak equity outstanding for the Limited Partner is USD 10.18 million, against the total USD 13.23 million equity contribution. The contribution figure includes ~USD 1.2 million of working-capital drag from Indonesian VAT (PPN at 11 percent on equipment CAPEX, refunded by the tax authority on a ~12-month lag). The cross-cover effect from Pasarjaya's October 2029 commissioning offsets approximately USD 3.05 million of later equity calls at Bandung and Lamsel — Pasarjaya's first operating year now generates substantial distributable cash thanks to the animal co-digestion uplift, flattening the LP's peak exposure more than the staggered award structure alone would deliver.

Capital structure runs the project-finance norm for infrastructure of this profile. Equity at 30 percent of CAPEX is drawn alongside a 10-year senior commercial loan at 7.0 percent during the three-year pre-commissioning period at each plant (one year of approvals plus two years of construction). Interest during construction is capitalized to the plant asset per PSAK 26. At each plant's commercial operations date, the loan refinances at par into a 22-year amortizing senior bond at 7.0 percent, matched to the remaining operating concession. The bond is secured against offtake receivables, plant assets, and concession rights — the standard project-finance security package. PMK 115/2021 Strategic Goods VAT exemption, if confirmed by Indonesian tax counsel pre-close, would add approximately 1 percentage point to portfolio Equity IRR and reduce peak equity by USD 1.2 million.

4. The risk picture

Four assumptions concentrate most of the project's risk.

The first is the CBG offtake price. At USD 15 per MMBTU it sits at the prevailing CBG market benchmark, with sovereign-quality offtake to PGN and Pertamina plus alternative qualified buyers protecting against single-counterparty concentration. Carbon credit revenue is sized at 10 percent of CBG sales — kept as a transparent separate revenue line — so a CBG price movement affects both lines simultaneously. Sensitivity at USD 9 / 11 / 13 / 15 per MMBTU shows portfolio Project IRR moves from 10.2 to 26.2 percent across that band; portfolio DSCR holds above the 1.30 covenant floor at every price (1.49 to 3.60 times). A contractual price floor at USD 11 per MMBTU in the PGN or Pertamina offtake is a meaningful derisking lever.

The second is animal feedstock supply across all three SPVs. Pasarjaya and Bandung each take 75 tonnes per day; Lamsel takes 100 tpd given the regency's established dairy and poultry catchment near Kec. Natar. Pasarjaya's animal sourcing comes from peri-urban West Java (Bekasi / Karawang / Subang); Bandung's from Bandung Regency, Garut, Subang, and Cianjur. The biogas-yield assumption at 400 cubic metres per tonne is mid-range of the Penang reference band; at the 300 m³/t low end Lamsel Project IRR drops to 16.8 percent (still clears the 15 percent target). Supply contracts with feedstock providers are the operating-side execution item.

The third is the Bandung tipping-fee structure. The 20 percent SPV share of the Kota Bandung municipal disposal rate (USD 5 per tonne to the SPV; 80 percent retained by Kota Bandung to fund the in-kind MRF and program oversight) is a negotiated split that aligns city and project economics. Removing the tipping fee moves Bandung Project IRR by 5.8 percentage points (25.1 to 19.4 percent), so the partnership remains structurally beneficial but Bandung is bankable without it.

The fourth is the PMK 115/2021 Strategic Goods VAT exemption. The base case includes the full 11 percent input VAT on equipment CAPEX with a 12-month refund lag, lifting equity contribution by USD 1.2 million at the portfolio level. Confirmation of the strategic-goods exemption by Indonesian tax counsel pre-close removes that drag — adds ~1 percentage point to portfolio Equity IRR and reduces peak equity outstanding by USD 1.2 million. Highest-value pre-close optimisation item.

The capital structure has meaningful headroom relative to the EBITDA capacity at all three SPVs. The base case 70/30 leverage produces a portfolio average DSCR of 4.17 times — well above the industry-healthy range of 1.50 to 1.80 times — indicating capacity to re-lever if the LP prefers higher Equity IRR. At 85/15 leverage even the lowest-DSCR SPV (Lamsel) sits at 2.80 times, leaving 1.5 times the floor as buffer.

5. The ask

The platform raises USD 40 million from a single Limited Partner, deployed across three SPVs on a staggered schedule that matches each project's award.

The LP holds 100 percent of the economic interest at the InvestCo holding vehicle, which in turn owns 100 percent of each of the three OpCos — PT Wahana Semesta Utama for Pasarjaya, PT Jagad Bumi Nusantara for Bandung, PT Greenviro Nusantara for Lamsel. Each OpCo holds its own operating license, land arrangement, EPCC contract, offtake agreement, and senior project bond after commissioning. The InvestCo aggregates portfolio-level cash and reporting to the LP.

Equity is drawn against the 1 percent / 59 percent / 40 percent profile across each SPV's approvals year, construction year 1, and construction year 2 respectively. Total equity called is approximately USD 13.2 million — 30 percent of CAPEX (USD 12 million) plus the working-capital drag from input VAT during construction (~USD 1.2 million, refunded post-COD). A 10-year senior commercial loan at 7.0 percent covers the remaining 70 percent of CAPEX (USD 28 million plus capitalized interest during construction); the loan refinances at par into a 22-year amortizing senior bond at 7.0 percent on each SPV's COD. Peak quarterly cash call lands in Q4 2028 and Q1 2029, when all three SPVs are drawing simultaneously — approximately 13 percent of the total raise in the peak quarter.

The concession runs twenty-five years from award at each SPV — one year of approvals, two years of construction, and twenty-two years of operations with revenue. Commercial Operations Dates: PD Pasarjaya October 2029, Bandung April 2030, Lamsel October 2030. Concession ends: October 2051, April 2052, October 2052.

EPCC delivery is handled by Samaiden or Citaglobal or agreed EPCC with capabilities and funding interest on the overall scope with Orec on the anaerobic-digestion-specific scope at each plant. The technical consultant is Greenviro Solutions, with operating-data continuity from the Penang Bio-Methane plant. The Indonesian operating company runs daily operations under a long-term contract.