Slovak firms will invest around US$1.4 billion over the next few years to develop infrastructure, particularly in the energy sector, and build a cement plant in Indonesia.
The projects would be carried out through a public private partnership (PPP) scheme as well as through pure private arrangements, Coordinating Economic Minister Hatta Rajasa said on Monday (December 10, 2012) after attending the Indonesia-Slovakia Business Forum in Jakarta.
One of the projects in the pipeline was the construction of a coal power plant with a capacity of 2×60 megawatts in Batam, Riau Islands, he said, without specifying the value of investment.
Local media had earlier reported that the construction of the power plant, to be located on Batam’s Kabil Industrial Estate, would likely cost around US$185 million and be conducted by Slovak’s engineering, procurement and construction firm, the Istroenergo Group, along with PT Pembangunan Kota Batam.
“We expect the ground breaking of the project to take place in March next year,” Hatta said, adding that apart from that, Indonesia and Slovakia were also exploring possibilities to distribute electricity or jointly build another power plant in Singapore.
In addition to investment in the energy sector, a Slovak firm, which Hatta did not name, would also set up a cement plant in East Kalimantan in an unspecified time frame.
The planned investments will further step up existing complementary cooperation between Indonesia and Slovakia, which has expertise in the technology, power generation and manufacture sectors, according to Hatta.
During the business forum, Hatta witnessed the signing of six memorandums of understanding (MoUs) by Indonesian and Slovak firms on cooperation in the energy sector, including for the power plant project, along with his counterpart, Slovak Economic Minister Tomas Malatinsky.
Malatinsky said that the cooperation in the energy sector would be strategic for both countries, particularly as Slovakia was prioritizing the sector, while Indonesia was still struggling to attain energy security.
Apart from this, Slovakia, a country the size of East Java with a population of over 5 million, aimed to forge closer economic cooperation with Indonesia, currently its main investment destination in the Southeast Asia region, which was marked by the establishment of its investment and trade development agency, SARIO, Malatinsky said.
SARIO was established to provide practical and legal assistance to Slovak firms that wanted to do business in Indonesia, he said.
Slovakian Ambassador to Indonesia Stefan Rozkopal said that in addition to investment in traditional sectors, such as machinery, electronics and agriculture, Slovak firms would possibly enter nontraditional sectors, such as information technology. Slovakia would also aim to boost bilateral trade with Indonesia, Southeast Asia’s largest economy, since currently the figure was still small.
Bilateral trade annually expanded by 6.08 percent on average to stand at US$65.95 million last year. From January to September this year, trade was valued at US$40.27 million, down by 10.19 percent from the previous year, according to Indonesia’s Trade Ministry statistics.
Indonesia’s exports to Slovakia comprise palm oil, natural rubber, footwear and accessories for video recording, while imports consist of machinery, electronics, vehicles and explosive substances.
The Trade Ministry’s director for export products and creative economy development, Dody Edward, said that Slovakia, a nontraditional export destination, could also serve as a hub to enter neighboring countries. (Linda Yulisman, The Jakarta Post)