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Jakarta Post

$137b worth of investments in pipeline for infrastructure projects: Luhut

  • Norman Harsono

    The Jakarta Post

Jakarta   /   Tue, December 10, 2019   /   04:19 pm
$137b worth of investments in pipeline for infrastructure projects: Luhut Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan (center) attends a press conference on domestic investment project in Jakarta on Tuesday. (JP/Norman Harsono)

The Office of the Coordinating Maritime Affairs and Investment Minister estimates that US$137 billion worth of investment are in the pipeline for infrastructure projects across Indonesia.

Most of the investment (46 percent) is slated for oil and petrochemical refinery projects, while mineral processing facilities account for the second-largest share (34 percent), according to the coordinating ministry. The remaining planned investment is bound for transportation, tourism and other sectors.

Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan told reporters in Jakarta on Tuesday that the investors in refineries included the United Arab Emirates (UAE), which is slated to invest in developing three refineries to be operated by Indonesian state-owned oil company Pertamina.

“Later this week, I will go to Abu Dhabi to prepare for signing the contract between the [Indonesian] President and the [UAE] Crown Prince. That’s for the three refinery projects,” he said.

Luhut, who has been in talks with various mining companies over smelter projects, added that Japan’s Sumitomo Metal Mining was ready to invest around $2.8 billion to build a High Pressure Acid Leach (HPAL) nickel smelter in Indonesia.

The coordinating minister said he had also been in talks with several global investors, including the Japan Bank for International Cooperation (JBIC) and the US International Development Finance Corporation (DFC), who would “bring in several billion US dollars” for Indonesia’s sovereign wealth fund.

“China, Japan, Abu Dhabi, the US and Singapore will become a single financial umbrella for Indonesia,” he said.

The ministry, Luhut continued, was also eyeing electronic manufacturers such as Japan’s Panasonic, China’s CATL and South Korea’s Samsung SDI, for potentially building a lithium-ion car battery factory in either West Java or Central Sulawesi.

The government has been striving to attract more investment to the country to help spur economic growth, which slowed to its lowest level in more than two years in the third quarter. Luhut's ministerial portfolio was expanded to encompass investment – from previously being limited to maritime affairs – to expedite investment commitments made during his roadshows since earlier this year.

The growth of investment, which accounts for around a third of the country’s gross domestic product (GDP), slumped to 4.21 percent in the third quarter from 6.96 recorded in the same period last year, Statistics Indonesia (BPS) data show. To attract more investment, President Joko "Jokowi" Widodo has promised to relax 40 ministerial regulations this month, ease taxation policies, streamline business licensing procedures and open up sectors previously off-limits or restricted for foreign investors.