Analysis of Investment Feasibility and Risk for the Batanghari Micro-Hydro Power Plant Project at PT Brantas Total Energi

The increasing demand for electricity and the Indonesian government's commitment to reducing carbon emissions necessitate the development of renewable energy, including Mini Hydro Power Plants (PLTM). PT. Brantas Total Energi, a subsidiary of PT. Brantas Energi, plans to develop the Batanghari PLTM project in West Sumatra. This study aims to evaluate the investment feasibility of this project from financial and risk perspectives and to provide recommendations for its continuation. The research methodology employed financial analysis using four key indicators: Internal Rate of Return (IRR), Net Present Value (NPV), Discounted Payback Period (DPP), and Profitability Index (PI). In addition, a sensitivity analysis was conducted to assess investment risk in response to changes in key variables, such as electricity sale tariffs, investment costs, and electricity production rates. The results indicate that the Batanghari PLTM project achieves an IRR of 12.25%, a positive NPV of IDR 31.257 billion, a DPP of 15 years, and a PI of 1.18, signifying that the project is financially feasible. However, the sensitivity analysis results show that the project is somewhat sensitive to fluctuations in tariffs and investment costs. In a worst-case scenario, such as a decrease in electricity tariffs and an increase in investment costs, the project could become financially unfeasible. Consequently, it is recommended that PT. Brantas Energi and PT. Brantas Total Energi conduct regular risk monitoring and consider mitigation strategies, such as tariff renegotiations or investment cost controls, to maintain the project's sustainability and profitability.