Home News Indonesia’s PLN, Masdar Inks Investment Deal US$128M

Indonesia’s PLN, Masdar Inks Investment Deal US$128M

PT Pembangkit Jawa Bali (PJB), signed an investment deal worth of Rp1.8 trillion (US$128.58 million) with Masdar, an energy company from the United Arab Emirates (UAE), to develop Indonesia’ first Floating Photovoltaic Solar Power Plant - Photo by Coordinating Investment Board Office

JAKARTA (TheInsiderStories) – PT Pembangkit Jawa Bali (PJB), signed an investment deal worth of Rp1.8 trillion (US$128.58 million) with Masdar, an energy company from the United Arab Emirates (UAE), to develop Indonesia’ first Floating Photovoltaic Solar Power Plant. The project to be sited on Cirata Dam, West Java, with installed capacity of 200 megawatts (MW).

The project is part of the government’ drive to increase the use of renewable energy in the country’ energy mix to 23 percent by 2025. While, Masdar is a renewable energy and clean technology sector company based in Abu Dhabi.

In 2017, the unit of state-owned power producer, PT Perusahaan Listrik Negara (PLN) has inked the agreement with estimating costs $180 million. Following the agreement, the two parties will set up a joint venture company (JVC), in which PJB will hold 51 percent with the remaining 49 per cent held by Masdar.

At that year, its reported in the first stage, the JVC firm will develop 50 MW of installed capacity, with commercial operation date target set for the second quarter of 2019. Meanwhile, the second, third and fourth phases will have an installed capacity of 150 MW, and will come on line in the first quarter of 2020.

During his working visit to Abu Dhabi, head of Coordinating Investment Board, Bahlil Lahadalia, and other ministers lead by coordinating minister for maritime and investment, Luhut Binsar Panjaitan, met with CEOs and investors from UAE.

Beside met CEO of Masdar, Mohamad Jameel Al Ramahi, he also met EGA’ managing director Abdulla Jaseem bib Kalban, MD Lulu chairman Yusuf Ali M.A, and CEO of BRS Ventures, Binay Shetty. The ministers has accompany President Joko Widodo on a working visit during Jan. 12 – 13.

“With this investment potential from the UAE, proving investment in the country is very inclusive or open. This visit also indicates that the government of Indonesia is also encouraging investment sourced from other countries besides East Asia,” said the chairman.

Some sectors that have been encouraged from UAE are oil refinery construction project, petrochemical industry, aluminum smelter industry, and investment financing.

“President wants us to reduce dependence on oil imports. Therefore, the government is pursuing the construction of a new refinery or Grass Root Refinery. That is one of the strengths of Middle Eastern entrepreneurs, so we encourage SOEs and private sector cooperation with them,” he noted.

Last December, Indonesia and the UAE has 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 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 $10 billion since September to finance infrastructure projects in Southeast Asia’ 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.

Indonesia is currently also in the process of Omnibus Law to provide legal certainty for the SWF, Pandjaitan stated. The two countries are also preparing a memorandum of understanding 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.

Beside PLN and Masdar, state-owned mining holding, PT Indonesia Asahan Aluminium 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.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com