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Energy and mining investments in Indonesia fall to 5-year record low in 2020
In Indonesia, companies delayed or even pulled out of several multimillion dollar projects last year, including projects to develop metal smelters, oil and gas fields, power plants and oil refineries.
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A worker inspects solar panels installed on the roof of the Electricity Directorate General at the Energy and Mineral Resources Ministry in Jakarta, on Sept. 28, 2020. (JP/Dhoni Setiawan)
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nergy and mining investments hit the lowest level in at least five years in 2020, shrinking 26.6 percent year-on-year (yoy) to $24.4 billion as the coronavirus outbreak canceled projects across the board, reducing Indonesia’s chance of meeting its economic goals on time.
Energy and Mineral Resources (ESDM) Ministry data revealed that the sharpest annual decline was booked in the electricity sector (42.15 percent), followed by mining (40 percent), renewables (17.7 percent) and then oil and gas (6.21 percent).
“There was indeed a decline compared to 2019. This was because of the challenges we faced,” acknowledged Energy Minister Arifin Tasrif at a virtual press conference on Jan. 7.
The COVID-19 pandemic rammed global energy and minerals demand, such that commodity prices fell to record lows and companies drastically cut capital spending.
The International Energy Agency (IEA) projects that global energy investments, excluding mining investments, fell 18 percent yoy to $1.55 trillion in 2020.
In Indonesia, companies delayed or even pulled out of several multimillion dollar projects last year, including projects to develop metal smelters, oil and gas fields, power plants and oil refineries. The data shows that energy and mining investments hit 23.6 percent lower than the 2020 target of $35.9 billion.
