The province is home to at least nine oil and gas fields, including the Ambalat Block that holds 764 million barrels of oil reserves and 1.4 trillion cubic feet of gas reserves, according to data from the regional administration.

It is also rich in non-conventional gas reserves amounting to 23 trillion cubic feet.

However, the biggest surprise comes from the province’s huge hydropower potential that could, if developed, generate 33,000 megawatts (MW) of electricity.

Apart from the energy side, the country’s border with neighboring Malaysia also hosts 800,000 hectares of oil palm plantations in Bulungan, Nunukan, Malinau and Tana Tidung regencies, as well as 17,400 ha of farm land in Nunukan alone.

Industry Minister Airlangga Hartarto said that the government had to make the best use of the province’s abundant hydroelectricity potential, vowing support to enable it to become the country’s new industrial center, especially within the planned Tanah Kuning industrial estate. The ministry recently proposed the estate be considered a national strategic project.

“We have to throw full support behind the development of North Kalimantan as an industrial province, especially by becoming a mineral processing center within the next seven to 10 years, as the development of a smelter alone can take about three to four years,” Airlangga said during a North Kalimantan investment forum on Wednesday.

Smelters in North Kalimantan could be supplied with mineral ore from various regions in the country, such as from Sulawesi Island, Maluku and Papua provinces, he added.

The minister cited the commitment by a local firm to build dams to generate 6,600 MW of low-priced electricity.

The ministry estimated the development of the power plants to cost Rp 170 trillion (US$12.7 billion).

In a bid to enhance the ease of doing business to attract more investors, North Kalimantan Governor Irianto Lambrie planned to revise Governor Regulation No. 43/2014 on the delegation of authority in the issuance of integrated permits.

“It has never been easy to convince investors. If we do the promotion today, they may only come and make the investment within a year or two,” Irianto said.

Becoming Indonesia’s 34th province in 2013, North Kalimantan is 65 percent the size of the country’s main island of Java. However, its population totals only about 800,000 people, about 1 percent of Java’s population.

Investment is expected to become a future key driver of growth in the province.

The Industry Ministry’s director general for metals, machinery, transportation and electronic equipment, I Gusti Putu Suryawirawan, cited land acquisition as the major bottleneck hampering investment and therefore warned the regional administration to immediately settle issues surrounding land procurement in order to speed up the development of the new industrial estate. Putu pointed out the late designation of areas as new industrial zones as another problem.

“All this time, the regional administrations have often been late in appointing certain areas to be new industrial zones, although a master plan to develop them is available. As a result, many landlords have bought the existing plots of land and refused to sell them back at a normal price,” Putu said.

Damaged land, which makes investment costly and commercially unviable, as well as ownership of land by indigenous groups are two other issues to be addressed, he added.

“If all problems pertaining to land can be settled, it will be easier for the North Kalimantan administration to attract investors,” Putu said.

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