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Indonesia, UAE Signs SWF and Energy Cooperations

Indonesia and the United Arab Emirates announced the signing of the two countries' cooperation and business agreements - Photo by Maritime and Investment Office.

JAKARTA (TheInsiderStories) – Indonesia and the United Arab Emirates (UAE) on Monday (12/16) announced the signing of the cooperation and business agreements in the fields of energy, agriculture, and sovereign wealth fund (SWF) had been realized. The agreement was signed by Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan and the UAE Crown Prince Mohammed bin Zayed bin Sultan Al Nahyan in Abu Dhabi.

The two countries had explored plans to establish SWF of up to US$10 billion since September to finance infrastructure projects in Southeast Asia’s biggest economy. Week ago, Pandjaiatan told reporters that $137 billion worth of investment is 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 minister. The remaining planned investment is bound for transportation, tourism, and other sectors.

“This is the initial preparation for President Joko Widodo’s state visit in January. The meeting is also to ensure the cooperation ‘government to government scheme’ and business agreements have been conveyed and run well,” Pandjaitan said in a written statement.

Indonesia is currently also in the process of Omnibus Law to provide legal certainty for the SWF, Pandjaitan said. The two countries are also preparing a memorandum of understanding (MoU) to support infrastructure development in Indonesia, where the ADIA (Abu Dhabi Investment Authority) will be an important partner for Indonesia, he added.

In petrochemicals and petroleum sectors, some agreed cooperation was the MoU of state-own oil company PT Pertamina and Abu Dhabi National Oil Company (ADNOC) for the development of a refinery in Balongan, then Pertamina and Mubadala for the development of a refinery in Balikpapan.

Then, state-owned electricity company PT Perusahaan Listrik Negara (PLN) and Masdar for the construction of a 145 Gigawatt floating solar panel, state-owned mining holding, PT Indonesia Asahan Aluminium (Inalum) and EGA for the development of a 500,000 ton-based aluminum smelter and hydropower smelter in North Kalimantan, publicly listed company, PT Chandra Asri Petrochemical Tbk (IDX: TPIA) and ADNOC with a long-term contract.

Meanwhile, an agreement in agriculture that will take place in Elite Agro, West Java and Central Kalimantan, as well as the MoU between DP World and Maspion for integrated industrial 120 hectares. It also discussed the construction of the Great Mosque in Solo, Central Java, which was planned to begin construction initially in January 2020. Pandjaitan also invited UEA to see the potential of hydropower in North Kalimantan and Papua.

“We hope that the UAE will become partners and friends to develop several carbon projects in Indonesia,” he concluded.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com