Pertamina Geothermal Energy (PGE) (PGEO.JK), a unit of Indonesian state energy firm Pertamina, has signed initial agreements with two Kenyan companies to explore partnerships in geothermal power projects, Indonesia's foreign minister said.

PGE signed a memorandum of understanding (MoU) with Geothermal Development Company to explore a partnership that could be worth $1.5 billion, and a separate MoU with Africa Geothermal International No. 1 Ltd (AGIL No. 1) for a potentially $700 million deal, Retno Marsudi said.

The deals were signed on the sidelines of President Joko Widodo's visit to Kenya.

"This kind of cooperation is very important to pave the way for other energy cooperation, including in the upstream oil and gas sector and new and renewable energy," Retno said in a video statement late on Monday.

PGE on Tuesday said its agreement with AGIL is aimed at development in the Longonot concession in Kenya which could yield up to 500 megawatts (MW) of geothermal power, of which 140 MW is ready to be exploited.

PGE parent Pertamina also signed an MoU to explore partnership potential with National Oil Corporation of Kenya during the same trip.