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erman engineering company Siemens AG announced that a deal had been signed with Chinese firms to participate in infrastructure development programs in regions across Indonesia under China’s mega infrastructure project, the Belt and Road Initiative (BRI).

Siemens Indonesia signed agreements with three Chinese firms for the development of gas- and coal-fired power plants at the BRI International Summit that was held by Siemens in Beijing on Wednesday.

“The power [plant] programs will take place outside Java. We are talking about Kalimantan, Sulawesi, Papua and others,” said Siemens Indonesia’s head of power and gas division, Bernaud Stuckart, on Thursday.

The development programs would focus on medium- and small-sized power plants that were most-needed in small and rural regions because they were still in need of electrification and power, said Stuckart.

The three Chinese firms collaborating with Siemens are China National Chemical Engineering Group Corporation, Guangdong Yudean Group and China Gezhouba Group Corporation International Engineering.

The deal would not only focus on developing power plants, Siemens said, it would also offer educational training to people who were working on the project and vocational training to young people in the regions.

“This is a general memorandum of understanding [MoU] that shows we will cooperate with each other. The next step is to get together and work out the details, which will then be presented to the Indonesian government,” Stuckart said.

The participation of Siemens and the Chinese firms in infrastructure development in the regions is crucial, especially after President Joko “Jokowi” Widodo said he would shift from infrastructure to human development.

Early this year, Jokowi announced that his administration would increase investment in human resources, meaning that the infrastructure budget might be slashed.

Yudi Prabangkara of the Office of the Coordinating Maritime Affairs Minister said the firms were still discussing the program with the government.

“The government, Siemens and the Chinese firms are still in talks about the program’s realization. We are negotiating with each other,” added Yudi.

He said the agreement between Siemens Indonesia and the Chinese firms was one of several infrastructure development programs under the BRI. “The final decision will be made when the presidents of China and Indonesia meet in July.”

Siemens will focus on the technology aspect of the program, while the Chinese firms will play a role in financing, engineering, procurement and construction.

During the Belt and Road International Summit, the company also signed deals with Chinese entreprise for collaboration in other countries such as the Philippines and Mozambique.

“The BRI has the potential to change the world. It can also change world trade and the economic order. It is a long-term economic strategy that represents a 1-trillion euro investment that could potentially improve [the lives of] more than 70 percent of the world’s population,” said Siemens AG president and CEO Joe Kaeser.

The development of infrastructure outside Java is believed to be the key to higher economic growth in Indonesia.

“Java, in terms of area, only covers around 7 percent of Indonesia but contributes [more than 50 percent of] the gross domestic product [GDP].”

“If we would like to [improve] our economic growth, we need to reduce the disparities between Java and other regions,” said National Development Planning Agency (Bappenas) undersecretary of infrastructure Wismana Adi Suryabrata.

He added that Indonesia was currently open to possible partnerships and collaboration through the BRI for infrastructure development projects outside Java, especially in North Sumatra, North Kalimantan, North Sulawesi and Bali.

Wismana said an investment of around US$359.2 billion was required to develop the project.

“Out of the total estimation, 41.3 percent will be covered by the Indonesian government. We hope the rest will come through cooperation with the BRI, public-private partnerships and non-government infrastructure investment,” he added.