State-owned construction firm PT Wijaya Karya Tbk (IDX: WIKA) and Indonesian Eximbank pouring an investment US$83 million in Tanzania - Photo by Maritime and Investment Office.

JAKARTA (TheInsiderStories) – State-owned construction firm PT Wijaya Karya Tbk (IDX: WIKA) and Indonesian Eximbank pouring an investment US$83 million in Tanzania. The funds are shared by $33 million for hotel construction in its capital Dodoma and $50 million for government buildings, the coordinating minister for maritime and investment Luhut Binsar Panjaitan said in a written statement on Tuesday (12/17).

“As a follow-up, WIKA and Indonesia Eximbank have held technical discussions with Commonwealth Parliamentary Association (CPA) to discuss technical projects, including memoranda of understanding, feasibility studies, and financing schemes,” he said.

The minister also discussed other economic cooperation in which Tanzania was a supporter of the formation of the Prefential Trade Agreement Indonesia – East African Community (EAC).

“This is my first visit to Africa as Head of the Indonesian Infrastructure Task Force for Africa, as mandated by President Joko Widodo,” he said while thanking Tanzania for his support in the Indonesia – Africa Infrastructure Dialogue (IAID) held in Bali in August. .

Pandjaitan revealed that on the sidelines of the IAID, the Indonesian and Tanzanian delegations signed the Framework Agreement on the Construction of the Zanzibar Bulk Liquid Terminal, and could be extended to the construction of a container port with a value of $190 million.

Then in the energy and mining sector, he went on, in November 2019 there had been ongoing discussions between PT Timah Tbk (IDX: TINS) and STAMICO, the Tanzania state mining company.

“About mining cooperation for minerals, namely gold, phosphate and tin. Indonesian Timah has sent a Letter of Intent to STAMICO as well as an initial draft of the memorandum of understanding for cooperation between the two parties,” he said.

While PT Pertamina, which has bought a majority stake in Maurel & Prom including its operations for gas production in Tanzania since 2017. Pertamina, through its operation by Maurel & Prom hopes to increase its production in Tanzania, Pandjaitan adds.

Then, in a meeting with Minister of Works, Transport and Communications Isack Mawelwe, Pandjaitan stated that there was still plenty of room to increase trade cooperation between Indonesia and Tanzania.

“Indonesia has 270 million inhabitants, so it is a big market for Tanzania if you want to invest. We witnessed a positive trend in trade growth of around 11 percent between 2014 and 2018. However, there was a 22 percent decline in the January-September 2019 period, compared to the same period in the previous year,” he noted.

He also explained that one effective way to stimulate trade between the two countries was to reduce barriers to tariff trade through the establishment of Preferential Trade Agreements (PTA).

“If possible, Indonesia would like to propose to establish a bilateral PTA with Tanzania. Since 2017, Indonesia has proposed to make a PTA between Indonesia and EAC. Tanzania’s support will be very meaningful, especially to assign each official to hold a preliminary discussion on this issue,” he noted adding the┬ávisit also resulted in an agreement on a follow-up dialogue between Tanzania and Indonesia in February 2020 to strengthen cooperation in the economic field.

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