Indonesia courts Chinese investment for infrastructure projects

Out-Law News | 31 Aug 2018 | 3:43 pm | 1 min. read

The Indonesian government has offered $13.2 billion worth of infrastructure projects to companies in China, holding a market-sounding event in Guangzhou of south China attended by 90 potential investors.

Indonesian investment coordination agency BKPM and the consulate general of Indonesia in Guangzhou outlined available projects including electricity power plants under the independent power producer plan and toll roads.

Work on the government-to-business cooperation (KPBU) scheme will be guaranteed by infrastructure financing guarantee agency PT Penjaminan Infrastruktur Indonisia (PII), according to Tamba P. Hutapea, the deputy of investing planning in BMPM.

Hutapea said that the government invited domestic and international investors to take part in the KPBU projects and could support them in form of guarantees as fiscal and non-fiscal incentives.

"A few companies have expressed their interest in the projects," Hutapea said

Companies attending the event included CCCC Industril Investment Holding Co. Ltd, China Energy Engineering Group Guangdong Electric Power Design Institute Co. Ltd, Guangdong Zhiyuan New Material Co. Ltd, Guangdong Shengda Investment Group and China Southern Grid Co. Ltd.

According to Russian news agency ITAR-TASS the president of Indonesia Joko Widodo started a series $150bn worth of infrastructure projects several years ago for the development of Indonesia. The work would be paid for with $15bn of public funds and the rest would be raised through foreign investment.

China's has increased its direct investments in Indonesia in recent years. BKPM said that Chinese foreign direct investment in Indonesia in the first six months of 2018 was $1.3bn, covering 1,202 projects. Only Singapore ($5bn) and Japan ($2.4bn) invested more. Investment from China was $3.4bn in 2017 and and $2.7bn in 2016.