Financial Problems Hung Over Britishvolt's Investment Plans

Bahlil Lahadalia, head of the Investment Minister/Investment Coordinating Council (BKPM), revealed that British battery company Britishvolt is finalising plans to build a battery factory. "Britishvolt from England will enter the EV battery ecosystem and for the location (of the factory construction), God willing, itis almost clear," Bahlil told a press conference after a limited meeting with Indonesian President Joko Widodo on Wednesday (2023.1.11).

However, Balier declined to give further details. He simply stressed that any investment in the electric vehicle ecosystem would be welcomed. That means Indonesia won't play hot.

Britishvolt's plan to build a battery factory adds to a long list of foreign investments in Indonesia's electric car industry. Britishvolt has been aiming to set up an electric vehicle (EV) battery factory through a partnership with Bakrie Group subsidiary PT VKTR Teknology Mobilitas since last year. For the record, Britishvolt aims to produce 38 gigawatt hours (GWh) of electric car batteries per year, with production starting in the fourth quarter of 2023 or early 2024. But Britishvolt's financial problems could destroy a quadrillion pounds worth of investment, or about 70 rupiah.

In October 2022, the Guardian reported that startup Britishvolt had run out of money for its giant factory project. In fact, there's only enough cash left over for the next month of operations. Britishvolt even asked the British government for £30m in short-term funding, but was refused. Last week, Britishvolt was in talks to sell a majority stake to an undisclosed consortium. However, the Guardian reported that DeaLab Grou would lead the consortium. The UK-based private equity firm has been involved in various financing projects in Indonesia's fossil fuel and renewable energy sectors. DeaLab will partner with the Pike Group in the consortium.

DeaLab and Barracuda Group are owned by Reza Eko Hendranto, an Indonesian banker who previously worked for jpmorgan Chase, an American investment firm. Barracuda Group is also working with an Indonesian partner on nickel mining. Investors will reportedly pay £30 million for a 95% stake in Britishvolt. This will be followed by a further £128m injection from the consortium to fund the Britishvolt business plan. The issue means Britishvolt's other shareholders, including co-founders Orral Nadjari, Glencore and Ashtead, will hold just 5% of the shares, worth less than £2m. In fact, a year ago, Britishvolt reportedly bought the DeaLab consortium of companies with unicorn status or a total valuation of more than $1 billion.

Britishvolt's financial crisis could have a negative impact on its investment plans in Indonesia and on Mr Bakrie's business plans. Separately, PT VKTR Teknologi Mobilitas has postponed an initial public offering that had been scheduled for December or early this year. VKTR's IPO will determine the company's ability to expand, which requires a lot of capital. Apart from Britishvolt, Bakrie is also working on transport electrification projects, developing electric buses for public transport in partnership with Chinese company BYD. Last year, 30 BYD-VKTR electric buses were operating in Jakarta as part of TransJakarta's operating fleet. VKTR also invested in and partners with UK-based conversion and heavy mobility technology company Equipmake.