Indonesia may get $1.3b investment in renewable energy projects

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A number of investors from Europe, United State and Qatar are in talks with the Indonesian government for collective investment of around $1.3 billion in the sectors of renewable energy and power plants in the country. This was revealed by a senior official at the Investment Coordinating Board (BKPM) .

The renewable energy projects are in line with the President Joko Widodo administration’s drive to reduce fossil fuel dependence in the country and expand the use of renewable energy.

The investment board is now facilitating meetings for investors with the representatives from the state electricity company PT Perusahaan Listrik Negara (PLN), the Energy and Mineral Resources Ministry and potential local partners.

“Currently, the investors are assessing potential areas for solar-powered electricity generators, such as North Sulawesi, West Kalimantan, South Kalimantan and East Kalimantan, as well as East and West Nusa Tenggara,” BKPM Chairman Franky Sibarani said in an official statement.

He added that several European companies have collectively offered up to $630 million in investment proposals in renewable energy projects in Indonesia. BKPM has received investment proposals worth $380 million from an unnamed Italian power company last week, he added

The Italian company hopes to build two power plants in Riau province – a $280 million steam powered plant with a capacity of 250 megawatts (MW) and a $100 million geothermal power plant with a capacity of 55 MW.

Sibarani also cited another investment proposal from the United Kingdom which entails building of a 200 MW solar plant with an estimated investment of $250 million.

In the first half of this year, BKPM recorded 226 ongoing power plant investment projects worth $1.3 billion in Indonesia. Renewable energy accounts for 10 per cent of the projects, including hydro-powered and geothermal generators.

“They are quite serious because those investors visited Indonesia and held meetings with several related ministries and institutions to seek the possibility of investing in the power sector,” Franky stated.

Meanwhile, the US ambassador Robert Blake, as quoted by the US Embassy in Indonesia,  said on Monday that the US plans to implement a $500 million programme in Indonesia that will help catalyse investment in renewable energy, preserve carbon-rich primary forests and encourage sustainable forest management.

He, however, did not give further information on the projects.

Another company that is looking to build natural gas-fired power plant project in the country is Qatar’s Nebras Power. The company has signed an agreement with PLN to conduct a feasibility study. It plans to build 500 MW plant and expects to kick off commercial operations by 2019.

According to Nebras press release in Qatar bourse, as part of the agreement, the company is also looking to invest in a floating storage and regasification unit (FSRU) for liquefying natural gas to supply part of the electricity needs of North Sumatra.

Nebras Power is an infrastructure investment firm which is 60 per cent owned by Qatar Electricity and Water Company, with the remainder split between Qatar Petroleum and Qatar Holding.

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