ISDN Holdings Acquires Majority Stake in PT Funda: A Strategic Leap in Indonesia’s Hydropower Market

Key Highlights for Retail Investors

• ISDN acquires 51% stake in PT Funda for IDR 25.5 billion (approx. S\$2.0 million): The Singapore-listed industrial automation and renewable energy company is strengthening its foothold in Indonesia’s fast-growing hydropower sector.
• PT Funda brings end-to-end hydropower capabilities: With expertise in both upstream Engineering, Procurement & Construction (EPC) and downstream Operations & Maintenance (O&M), PT Funda complements ISDN’s current mini-hydropower operations, enabling the Group to capture the entire project lifecycle value.
• Strong project pipeline and experienced team: PT Funda’s leadership team, boasting over 20 years of experience and 4,500 MW of hydropower projects across Asia, adds a pipeline exceeding 300 MW in planned capacity in Indonesia.
• Acquisition aligns with Indonesia’s renewable energy ambitions: The Indonesian government’s 2025–2034 plan targets a dramatic increase in renewables, with hydropower set to be the second largest source of electricity expansion.
• Potentially accretive to ISDN’s recurring income and long-term resilience: Enhanced project pipeline and capabilities position ISDN for scale and increased recurring cash flows.
• The deal is a non-discloseable transaction under Singapore Exchange rules: The acquisition does not require a formal SGX announcement as it falls below the materiality threshold.

Full Story: Strategic Expansion in Indonesia’s Booming Hydropower Sector

ISDN Holdings Limited (SGX: I07), a leading industrial automation company with a growing renewable energy footprint, has announced the acquisition of a controlling 51% stake in PT Funda Konstruksi Engineering (“PT Funda”), a specialist in hydropower project development in Indonesia. The acquisition, valued at IDR 25.5 billion (approximately S\$2.0 million), is set to be transformative for ISDN’s renewable energy ambitions in Southeast Asia.

What Does PT Funda Bring to the Table?

PT Funda, founded by a team of veteran engineers with over two decades of experience, delivers both upstream EPC (engineering, procurement, and construction) and downstream O&M (operations & maintenance) services for water conservancy and hydropower projects. This end-to-end capability is an ideal fit for ISDN, which has until now focused mainly on the development and operation of mini-hydropower plants.

PT Funda’s team has an impressive track record: over 70 hydropower projects designed and constructed across Asia, with a total installed capacity of 4,500 MW. Since 2014, the team has made significant inroads in Indonesia, having successfully delivered four grid-connected hydropower projects totaling 57 MW, including ISDN’s Lau Biang 1 plant. PT Funda currently has a robust pipeline of more than 10 projects, with a planned capacity exceeding 300 MW.

Why is This Acquisition Important for ISDN Shareholders?

• Enhanced Competitive Edge: By integrating PT Funda’s technical prowess and project delivery skills, ISDN can now offer full lifecycle solutions in hydropower – from early-stage development and geological surveys to EPC, and long-term O&M. This positions ISDN as a one-stop solution provider, which is attractive to both government and private sector clients in Indonesia.
• Growth in Recurring Revenue: Renewable energy already provides ISDN with stable and recurring cash flows. PT Funda’s addition is expected to strengthen this income base and enhance long-term business resilience.
• Large, Addressable Market Opportunity: Indonesia’s latest Electricity Supply Business Plan (RUPTL) 2025–2034 sets an aggressive target to double renewable energy capacity, aiming for 42.6 GW of new renewables and 10.3 GW of storage by 2034. Hydropower is projected to account for 27.5% of this growth, making it the second largest source of new capacity. ISDN is now well-positioned to capture a significant share of this massive market.
• Proven Collaboration: PT Funda was already the EPC contractor for ISDN’s Lau Biang 3 project prior to the deal, demonstrating a successful working relationship and operational synergy.
• Non-discloseable Transaction, But Still Significant: While the acquisition does not cross the Singapore Exchange’s materiality threshold for mandatory disclosure, it is strategically important as it strengthens ISDN’s market position and future growth prospects.

Management’s View

ISDN’s Managing Director and President, Mr. Teo Cher Koon, emphasized that the acquisition aligns with ISDN’s long-term vision to be a leading provider of renewable energy solutions in Indonesia. He highlighted the successful collaboration with PT Funda on previous projects and the team’s deep technical expertise as key reasons for the acquisition. Mr. Teo noted the “significant opportunities” presented by the Indonesian government’s renewed focus on renewables, which supports ISDN’s ambition to scale up its project pipeline and recurring income.

About ISDN Holdings Limited

Headquartered in Singapore, ISDN is a well-established industrial automation leader with over 10,000 customers and 78 sales offices across Asia. Its solutions power advanced manufacturing sectors such as semiconductors, medical devices, aerospace, industrial robotics, and clean energy. ISDN has been listed on the SGX since 2005 and on the Hong Kong Stock Exchange since 2017.

What Should Investors Watch?

• Potential pipeline conversion: Watch for the announcement of new hydropower project wins and the realization of the 300+ MW pipeline.
• Financial impact: Monitor future earnings reports for increases in recurring revenue and net cash flow from the growing renewable energy segment.
• Policy tailwinds: Indonesia’s RUPTL plan provides a strong policy backdrop for further renewables expansion, potentially boosting demand for ISDN’s integrated solutions.
• Further M&A: The acquisition signals ISDN’s appetite for growth in the renewables sector, and more deals could be on the horizon.

Conclusion

The acquisition of PT Funda is a strategic move that significantly enhances ISDN Holdings’ capabilities and growth prospects in Indonesia’s booming hydropower sector. It provides immediate technical expertise, a strong project pipeline, and positions the Group to benefit from Indonesia’s aggressive renewable energy targets. While the transaction itself may not be classified as material under SGX rules, its strategic implications and potential financial impact could be significant for ISDN shareholders.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions related to ISDN Holdings Limited or any other securities.

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