INVESTMENT IN UNCONSOLIDATED COMPANIES

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Investment in unconsolidated companies consists of the following:


	December 31,
	2024			2023
	(Dollars in thousands)
Investment in Sarulla		$	69,718	$	71,744
Investment in Ijen		72,367		51,695
Other investment, at cost		2,500		2,000
Total investment in unconsolidated companies		$	144,585	$	125,439

Investment in unconsolidated businesses, and equity in the earnings (losses) of investees are included under the Electricity segment.

The Sarulla Complex

The Company holds a 12.75% equity interest in a consortium that developed the 330 MW Sarulla geothermal power plant project in Tapanuli Utara, North Sumatra, Indonesia. The Sarulla project is comprised of three separately constructed 110 MW units. The Sarulla project is owned and operated by the consortium members under the framework of a joint operating contract and energy sales contract that were both executed on April 4, 2013. Under the joint operating contract, PT Pertamina Geothermal Energy, the concession holder for the project, provided the consortium with the right to use the geothermal field, and under the energy sales contract, PT PLN, the state electric utility, is the off-taker at the Sarulla complex for a period of 30 years. The Company has a significant influence over the Sarulla project through representation on Sarulla's board of directors, and thus accounts for its investment in the Sarulla geothermal project under the equity method prescribed by ASC 323 - Investments - Equity Method and Joint Ventures.

During the years ended December 31, 2024, 2023 and 2022, the Company made no cash equity investment in the Sarulla complex. As of December 31, 2024, total cash investment in the Sarulla complex since its inception is $62.0 million.

The Sarulla consortium entered into interest rate swap agreements with various international banks, effective as of June 4, 2014, and accounted for the interest rate swap as a cash flow hedge upon which changes in the fair value of the hedging instrument, relative to the effective portion, are recorded in other comprehensive income. The Company’s share of such gains (losses) recorded in other comprehensive income (loss) are as follows:


	Year Ended December 31,
	2024		2023		2022
	(Dollars in thousands)
Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge	$	602	$	(470)	$	8,370

The related accumulated gain recorded by the Company under accumulated other comprehensive income as of December 31, 2024, 2023 and 2022 and was $2.1 million, $1.5 million and $2.0 million, respectively.

In the second quarter of 2022, Sarulla agreed with its banks on a framework that will enable it to perform remediation works that are aimed to restore the power plants' performance. The first phase of the recovery plan included the drilling of an additional production well, which was successful, and certain modifications to surface equipment are still underway. Following the positive indications from the first phase, during the second quarter of 2024, Sarulla commenced discussions with the banks towards implementation of the additional phases. As the Company determined that the current situation and circumstances related to its equity method investment in Sarulla are temporary, no impairment testing was required at year-end.

The Ijen Project

On July 2, 2019, the Company acquired 49% of the Ijen geothermal project from a subsidiary of Medco Power (“Medco”), which is a party to a Power Purchase Agreement and holds a geothermal license to develop the Ijen project in East Java in Indonesia for a total consideration of approximately $2.7 million. As part of the transaction, the Company committed to make additional funding for the exploration and development of the project, subject to specific conditions. During 2024, 2023 and 2022, the Company made additional cash investments of approximately $15.9 million, $6.1 million, and $4.5 million, respectively, and $64.6 million in total. Medco retains 51% ownership in the project company, and the Company and Medco are developing the project and will operate the power plant jointly. The Company accounted for its investment in the Ijen geothermal project company under the equity method prescribed by ASC 323 - Investments - Equity Method and Joint Ventures. Additionally, the Company signed a contract for supply of key equipment to the Ijen project. Refer to Note 18 - Transactions with Related Entities for additional information.