JAKARTA (TheInsiderStories) – Global Infrastructure Partners (GIP), an American-based company, plans to invest around US$5 billion in Indonesia starting 2020, said the senior minister on Thursday (12/13). The investment will be allocated to develop airports in Jakarta, Bali, and North Sumatera, also electricity and transmission projects.
At the same day, coordinating minister for maritime and investment affairs, Luhut Binsar Pandjaitan met Japan Ambassador Masafumi Ishii to discuss investment possibility in Indonesia. Before, he had met Japan Economy and Trade Minister Hiroshige Seko to speed several cooperations, included aquaculture in Natuna.
Lastly, Pandjaitan has been visited by several potential investors. Last week, Japan Bank for International Cooperation (JBIC), Tokyo-based Softbank Group Corp and the United Arab Emirates (UAE) expressed their interest in investing in Indonesia’ new capital city projects worth of $33 billion.
A project of this nature will present opportunities for companies engaging in soft and hard infrastructure, such as urban development, utilities, toll manufacturing, environmental consulting, as well as those in the business of designing smart cities, said Pandjaitan.
“Investments, for instance, in maritime infrastructures, such as developing ports, in East Kalimantan could encourage industrial productivity in Indonesia’s eastern regions, which covers 64 percent of the country’s total land area,” adds by the minister.
Previously, he has announced the government currently is in talks with JBIC to establish a sovereign wealth fund, as it looks to double down on investment and boost economic growth. The minister did not specify what the fund will invest in nor its scale, he said that he has also been in talks with the UAE.
However, the fund he discussed with JBIC was different from one agreed with the UAE in September. That fund, he said, would collect money from overseas investment funds including the UAE, with the aim of attracting around $10 billion to be spent on infrastructure such as the development of new capital.
While, the cooperation with Softbank has long been established. Recently, Southeast Asian ride-hailing company Grab said it will invest $2 billion into Indonesia over the next five years using funds from SoftBank.
The investment aimed to speeding up the development of Indonesia’ digital infrastructure, include build a next-generation transportation network around electric vehicles in local cities and improving the way important services, such as health care, are delivered in the country.
The Indonesian Investment Coordinating Board has reported that the realization investment worth of Rp601.3 trillion (US$28.26 billion) in the nine month of (9M) of 2019, up 18.4 percent compared to 9M of 2018 of Rp535.4 trillion. The realization around 75 percent of this year target.
Chairman of Investment Coordinating Board, Bahlil Lahadalia reported, foreign direct investment (FDI) during the 9M of 2019 recorded Rp317.8 trillion, or up 17.8 percent compared to 9M 2018 Rp293.7 trillion. While, the domestic direct investment (DDI) Rp283.5 trillion or up 18.9 percent from a year ago Rp241.7 trillion.
Value of the investment realization in the third quarter (3Q) of 2019, he continued, reached Rp205.7 trillion, up 17.8 percent from same period in 2018 worth of Rp173.8 trillion. The amount of the investment realization 75.90 percent of 2019′ targets of Rp792 trillion, said the chairman.
In details the investments goes to transportation, warehouse, and telecommunication Rp39.3 trillion (19.3 percent). Then electricity, gas, and water Rp39.1 trillion (19.0 percent).
While, construction Rp16.9 trillion (8.2 percent); housing, industrial zones, and office Rp16.4 trillion); agriculture and farming Rp15.6 trillion (7.6 percent); and others Rp78.4 trillion (38.1 percent).
Based on provinces, Jakarta raised the largest investments with total amount Rp41.1 trillion, West Java Rp33.4 trillion, East Java Rp14.8 trillion, Riau Rp13.1 trillion, Central Java Rp11.1 trillion, and others Rp92.2 trillion.
Lahadalia acknowledged that this positive trend will continue in the future, especially supported by the strong determination of the government to continue economic reform, better utilization of Online Single Submission (OSS), and intensification of investment escorts by various relevant government agencies both at the center and area.
The top five countries that contribute to investment are: Singapore ($1.9 billion, 27.10 percent), Netherlands ($1.4 billion, 20 percent), Japan ($900 million, 12.90 percent), China ($1.0 billion, 14.3 percent), and Hong Kong ($400 million, 5.70 percent).
He also believed by the end of this year the realization investment could grow double digit after suffered last year and early of this year.
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