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hina'€™s largest investment fund, China Minsheng Investment Co. Ltd. (CMI), will lead a group of private Chinese companies to invest US$5 billion in Indonesia, which is in dire need of foreign investors to help support economic growth.

The company would act as a guide for at least 20 private enterprises from China to invest $5 billion in the construction of integrated industrial parks and towns in Indonesia, its executive said.

CMI CEO Li Huaizhen said the $5 billion fund was part of $40 billion committed by more than 20 private Chinese companies on March 27, which also saw an agreement signed between CMI and the Indonesia China Business Council (ICBC).

'€œWe have signed the investment agreement with the ICBC as a follow up on China'€™s commitment to invest more in Indonesia as mentioned during President Joko Widodo'€™s visit to Beijing last month,'€ Li told a group of reporters on Tuesday.

Li said CMI was prepared to invest in four main projects in Indonesia over the coming years '€” a seaport, a coal mine and cement and steel factories '€” that would attract a wide array of companies working in various sectors to the future industrial park, such as chemical and general aviation firms.

Of the four prospective projects, Li said CMI was ready to start investing in a steel factory, which would be constructed in two phases. For the first phase of construction, Li said the total investment would reach $1.6 billion.

However, Li said the company had yet to decide on the exact location as it was still in the process of review and discussion with the Indonesian government, including the Investment Coordinating Board (BKPM).

'€œWe will immediately disburse the funds when we have decided on the location. The main thing we consider is the traffic surrounding the location,'€ Li said, adding that the company would be open to collaboration with local companies as partners.

According to Li, the future steel plant will have a total production capacity of up to 6 million tons from the two phases of construction, which comprises 3 million tons each.

'€œWe hope that the plant can help Indonesia in reducing steel imports as currently national steel production reaches 6 million tons,'€ Li said without mentioning what type of steel would be produced.

Indonesia Iron and Steel Industry Association (IISIA) data shows that Indonesia'€™s total production of steel stood at 6 million tons last year from its total capacity of 9 million tons annually.