Photo: President Office

JAKARTA (TheInsiderStories) – Visiting South Korean President Moon Jae-In on Thursday (9/11) witnessed the signing of 12 investment memorandum of understanding (MoU) covering various sectors including water supply, low-cost house and power plants potentially valued at up to US$2 billion.

The agreements were signed prior to the start of a business forum and ahead of the meeting of South Korean President and Indonesian President Joko Widodo. President Moon arrived in Jakarta on Wednesday on a three-day state visit.

One major MoU covers financing of the Light Rapid Transport (LRT) project in Jakarta, between Korea Rail Network Authority (KRNA) and local government-owned corporate PT Jakarta Propertindo (Jakpro).

Based on the MoU, the KRNA has agreed to participate in financing Phase 2 of the Jakarta LRT project in Indonesia with a loan of US$500 million. KRNA is a railroad construction and management company in South Korea formed by the merger of KNR Construction Ltd and Korean Express Railroad Construction Corp.

KRNA announced that it has sent its LRT technical experts to the Ministry of Transportation in order to participate in Stages 2 and 3 of the Jakarta LRT projects worth $4.35 billion, covering the construction of approximately 110 kilometers and seven rail lines.

The LRT Stage 2 project will be implemented through public private partnership (PPP) schemes and available payment (AP) methods, which guarantee returns on investment according to President Director of Jakpro Satya Heragandhi.

‘It is expected we can easily raise funds from South Korean construction and engineering companies likely to participate in the project. So, it will inject economic vitality into domestic firms over the long term,’ he told TheInsiderStories.

The MoU between KRNA and Jakpro is actually a sequel to an agreement signed in 2016, where KRNA pledged to assist a feasibility study to complete the tracks of the entire LRT corridor in DKI Jakarta.

The other MoU was between Hanwha E&C Corporation of South Korea and Indonesian PT PP  Tbk (IDX: PTPP), to develop Affordable Housing Construction in Indonesia.

‘We are cooperating with Hanwa to develop low-cost residences. The program will be developed over the next three years,’ President Director of PTPP Tumiyana told TheInsiderStories.

Bilateral Meeting

President Widodo said some of the issues has discussed include an agreement to enhance the partnership between the two countries with a special strategic partnership.

In 2015 total value of South Korean investment in Indonesia reached $1.21 billion while trading volume increased 19.3 percent in 2017 to $30 billion, according to President.

“This is the President Moon’s first visit to ASEAN countries. This needs to be interpreted as a strong commitment to continuously improve bilateral relations between the two countries, “said President Widodo.

Related to developments on the Korean Peninsula, He stressed that Indonesia is urging North Korea to comply with UN Security Council resolutions related to Denuclearization of the Korean peninsula and stop testing of ballistic missile launches.

Following is the MoUs Signed by Indonesia and South Korean Business Companies on Nov 9:

1 MOU for Jakarta LRT Project (ROK) Korea Rail Authority
(ROI) PT Jakarta Propertindo
2 MOU for Karian-Serpong Bulk Water Supply PPP project (ROK) K-Water, Korea Eximbank
(ROI) Directorate General of Human Settlements
(ROI) Directorate General of Water Resources
3 MOU for Cooperation on Bangka Hydroelectric Plant Construction (ROK) K-Water
(ROI) Tojo Una-Una
4 MOU  for Affordable Housing Construction in Indonesia (ROK) Hanwha E&C Corporation
(ROI) PT PP (Persero) Tbk
5 MOU for LIDO Mixed-use Development Phase 1 (ROK) PT. POSCO E&C Indonesia
(ROI) MNC Group
6 MOU for Mutual Cooperation on Building an International Halal Hub in Indonesia (ROK) Korea Testing Laboratory
(ROI) PT Jakarta Industrial Estate Pulogadung
7 MOU for joint venture and Industriral Technology Cooperation in the die and mold Industry (ROK) Hanbit  Light Co Ltd
(ROI) PT. Aristo Satria Mandiri Indonesia
8 MOU for Cooperation on Promoting Advancement into the Indoesian E commerce Market (ROK) KOTRA
(ROI) PT Indo Lotte Makmur
9 MOU on Establishing Foundation for Bilateral Collaboration in the Maritime Industry (ROK) KOTRA, Korea Marine Equipment Global Partnering Council
10 MOU  for  Cooperation of Vocational centre for Clean Coal Power Operation and Operation and Maintenance, Cirebon (ROK) KOMIPO
(ROI) CEPR, Ministry of Industry
11 MOU for Cooperation on Kaltim 3 Coal Fired Power Generaton Project (ROK) Korea South-East Power Co
(ROI) CEPR, Ministry of Industry
12 Agreement on Financial Support Including Muara Tawar Gas Fired Combines Cycle Power Generation Conversion Project (ROK) Korea Trade Insurance Corporation
(ROI) Credit Agricole Bank


Written by Linda Silaen and Elisa Valenta, Email: