Firms from the US will invest up to US$5 billion to develop infrastructure projects in several sectors in Indonesia over the next two years, a minister says. The Indonesian and the US governments have agreed to step up cooperation, especially to develop infrastructure, Industry Minister MS Hidayat told reporters in Jakarta recently.
The commitment took the form of a memorandum of understanding (MoU) signed in Jakarta recently by the director general for industrial cooperation at the Industry Ministry, Agus Tjahajana, and Jose W. Fernandez, the US assistant secretary of state for economic and business affairs.
Speaking after the MoU was signed, Hidayat said that the governments had discussed the possible engagement of US firms in areas such as the manufacturing, energy and transportation sectors, and in fostering green initiatives, among other things.
“We’ve requested assistance, particularly to develop infrastructure facilities in 13 of 22 sectors set in the Master Plan for the Acceleration and Expansion of Indonesian Economic Development,” he said.
One project to be realized under the MoU was construction of four ethanol plants, to be jointly built and operated by state-owned oil and gas company PT Pertamina and the Texas-based Celanese Corporation in the US, according to Hidayat.
“An agreement between Pertamina and Celanese has been signed to develop synthetic ethanol fuel here by utilizing coal,” Hidayat said.
US firms were expected to provide consultants on infrastructure development, information technology and oil and gas projects, among other areas, the minister said.
The Celanese Corporation is a global technology leader in manufacturing specialty materials and chemical products used in major industries and consumer applications, the firm said in a statement.
Through its technological processes, the firm said it helped nations meet their rising demand for fuel by converting domestic natural gas and feedstock to liquid fuel.
According to the statement, Celanese intends to develop a 10 percent high-octane fuel ethanol blend by 2020, which, if successful, might help Pertamina reduce its dependency on gasoline imports by over 30 million barrels a year.
Pertamina and Celanese will soon asses a potential supply arrangement, potential locations for production facilities and establishing a distribution system, with initial production expected to begin in the next 30 months.
Indonesia’s demand for transportation fuel would reach 25 million tons over 2012 and rise by 6 percent a year through 2020, according to some estimates.
Fernandez said that the US wanted to take part in expanding the Indonesian economy through developing more partnerships.
“I am gratified by the economic success that we’re seeing in Indonesia and the success of the government here to create jobs and opportunities for the Indonesian people in their development. The United States government and US companies want to be a partner in that development,” Fernandez said.
The US is currently the fourth-largest source of investment in Indonesia, having pumped $702.9 million into the nation in the first half of 2012. Investment is one of the biggest contributors to Indonesia’s economy, which grew by 6.4 percent in the second quarter of this year, beating expectations. (Linda Yulisman, The Jakarta Post)