How Batang Toru’s Singapore structure evolved into Chinese SOE control

Indonesia’s January 2026 revocation of the Batang Toru hydropower permit has largely been framed as a decisive act of environmental enforcement following deadly floods in Sumatra.

But behind the regulatory action lies a deeper capital story — one that traces how a commercially financed renewable energy project gradually evolved into a state-backed asset anchored by a Chinese central state-owned enterprise and routed through Singapore holding companies.

The environmental controversy surrounding Batang Toru is longstanding. What is less examined is how the project’s ownership and financing structure changed under stress — and how that restructuring reshaped the stakes now facing Jakarta.

From commercial developer to state-backed sponsor

When construction began in 2017, the 510-megawatt dam was controlled primarily by Chinese-listed hydropower equipment manufacturer Zhefu Holdings, through its subsidiaries including Dharma Hydro Nusantara (DHN).

At the time, financing was expected to be led by Bank of China, which had agreed to fund a substantial portion of the US$1.67 billion project.

That arrangement began to unravel in 2019.

Amid escalating international criticism over risks to the critically endangered Tapanuli orangutan and the Batang Toru ecosystem, Bank of China withdrew from the financing package. The departure created a funding gap that stalled progress and triggered internal restructuring.

The project did not collapse. Instead, it entered a new phase.

In late 2020, SDIC Power Holdings Co., Ltd., a subsidiary of China’s State Development & Investment Corporation (SDIC), agreed to invest. By mid-2021, China’s state asset regulator had approved the move.

Within months, SDIC had acquired control of the Singapore-based holding vehicle Fareast Green Energy Pte. Ltd., consolidating a majority stake in the Indonesian developer PT North Sumatera Hydro Energy (NSHE).

What had been a commercially led project became majority-backed by a Chinese central state-owned enterprise.

The Singapore holding structure

NSHE is controlled through Fareast Green Energy Pte. Ltd., incorporated in Singapore in 2006.

Originally known as China Huadian Singapore Company Pte. Ltd., the vehicle reflects earlier state-linked roots, but its strategic significance deepened after the 2021 restructuring.

Fareast Green Energy’s shareholders today are two Singapore-incorporated companies:

• Jaderock Investment Singapore Pte. Ltd.

• Asia Hydria Pte. Ltd.

Board records show overlapping directors across the entities, including Li Runyao, Chen Qing and Ong Tiong Soon.

This interlocking governance suggests coordination across the ownership chain rather than dispersed or passive shareholding.

Singapore functions here as a structuring hub — a jurisdiction commonly used for outbound infrastructure investment due to regulatory predictability and access to international financing channels.

Jaderock: conduit for a central SOE

Jaderock Investment Singapore Pte. Ltd., incorporated in 2016, is wholly owned by SDIC Power Holdings Co., Ltd.

SDIC is a central state-owned enterprise reporting to China’s State Council through the State-owned Assets Supervision and Administration Commission (SASAC).

Although Jaderock holds only S$1 in paid-up capital, it operates as the direct conduit through which SDIC exercises majority control over the Batang Toru project.

In July 2019 — during the period when project financing was under strain — Jaderock registered a charge in favour of Bank of China Limited, Singapore Branch.

The registration indicates banking exposure at the shareholder level even before SDIC’s formal consolidation.

Following SDIC’s entry, financing escalated further. By 2022, a syndicated loan led by Export-Import Bank of China had been arranged, and SDIC approved a US$1.25 billion corporate guarantee backing the facility.

The project’s capital base thus shifted from commercially syndicated lending to policy-bank-supported financing under the umbrella of a central SOE.

Asia Hydria: minority shareholder within a secured framework

Asia Hydria Pte. Ltd., incorporated in December 2020, appears to have entered during the restructuring phase. It is capitalised with more than US$30 million in paid-up capital, including preference shares that may carry structured financial rights.

The company is owned by Singapore citizen Ong Tiong Soon and Indonesian national Wandy Wanto.

Corporate filings show that in February 2023, Asia Hydria granted an “all monies” charge in favour of SDIC Power Holdings Co., Ltd.

Such a charge does not confer ownership. However, it provides the creditor with secured rights over pledged assets in the event of default or financial distress.

In practical terms, SDIC occupies multiple positions in the capital stack:

• Majority equity owner via Jaderock

• Secured creditor over the minority shareholder

• Guarantor of project-level syndicated financing

Equity control and creditor leverage therefore converge within the same state-linked institution.

This does not automatically equate to hidden control. But it does reinforce structural alignment.

Environmental controversy unchanged

Importantly, the 2021 restructuring did not eliminate the environmental objections surrounding the project.

The dam remains located within the Batang Toru forest ecosystem, the only known habitat of the critically endangered
Tapanuli orangutan.

Environmental groups have argued for years that road construction and slope modification in steep, landslide-prone terrain increase hydrological risk. The site also lies along the seismically active Sumatra Fault.

The ownership shift changed the financial resilience behind the project. It did not alter the geography.

After commercial lenders retreated, state-linked capital stepped in and construction resumed.

That pattern — commercial withdrawal followed by sovereign consolidation — has been observed in other politically sensitive infrastructure projects globally.

Treaty positioning and leverage

Because the upstream holding companies are incorporated in Singapore, the structure potentially engages the Singapore–Indonesia Bilateral Investment Treaty.

If investors consider that their investment has been impaired, arbitration could be sought under treaty mechanisms, subject to jurisdictional and substantive thresholds.

Such disputes often hinge on whether regulatory measures constitute indirect expropriation or fall within a state’s recognised right to regulate for environmental and public welfare objectives.

Indonesia may also seek to limit treaty protections if it argues that certain holding entities lack substantive business operations.

Arbitration is neither automatic nor predetermined. But the presence of treaty access can alter negotiation dynamics, particularly when majority ownership rests with a foreign central SOE.

Danantara and sovereign exposure

Indonesia has indicated that assets of revoked permit holders could be transferred to Danantara, the country’s new sovereign investment vehicle.

If Batang Toru were nationalised, reallocated or otherwise absorbed into state hands, Indonesia would be intervening in a structure backed by:

• A Chinese central state-owned enterprise

• A policy-bank-led syndicated loan

• A US$1.25 billion corporate guarantee

At that point, environmental enforcement intersects directly with sovereign-backed capital and potentially bilateral sensitivities.

A capital evolution beneath an environmental dispute

The Batang Toru case illustrates how infrastructure ownership can evolve under pressure.

From a commercially financed project in 2017, to financing collapse in 2019, to majority consolidation under SDIC in 2021, the project’s trajectory reflects an escalation of state backing as controversy intensified.

Indonesia’s permit revocation now tests how environmental accountability interacts with globalised capital structures.

For Jakarta, the challenge is enforcing forest protection without destabilising investor confidence or triggering prolonged international disputes.

For investors, the episode demonstrates that layered ownership and treaty positioning provide leverage — but not immunity.

What began as a renewable energy venture has become a case study in how sovereign regulation and state-backed infrastructure finance collide when environmental risk becomes politically unavoidable.


Batang Toru: Ownership & Financing Evolution Timeline

Date	Milestone	Key Details
2017 (Aug)	Construction Begins	Project starts with a target completion date of July 2022.
2019 (Mar)	Financing Withdrawal	Bank of China withdraws funding amid intense environmental scrutiny.
2020 (Nov)	New Investment Agreement	SDIC Power Holdings Co., Ltd. agrees to invest in the project.
2021 (May)	Regulatory Approval	China’s SASAC officially approves SDIC’s investment in the project.
2021 (Aug–Oct)	Ownership Restructuring	SDIC acquires control of Fareast Green Energy Pte. Ltd. and consolidates its stake in NSHE.
2022 (Nov)	New Syndicated Loan	A loan led by the Export-Import Bank of China is disclosed.
2022 (Dec)	Corporate Guarantee	SDIC shareholders approve a US$1.25 billion guarantee to back the loan.
2023 (Feb)	Secured Legal Charge	Asia Hydria Pte. Ltd. registers an "all monies" charge in favor of SDIC Power.
2026 (Jan)	Permit Revocation	Indonesia revokes the permit following floods and an environmental audit.