Singapore pumps $12.4 Billion into Indonesia’s Green Economy

Singapore will be investing US$9.2 billion (S$12.4 billion) to support green investment and build a logistics port hub in Indonesia, President Joko Widodo said on Tuesday (Jan 25).

The money, he said, will fund renewable energy projects in Batam, Riau Islands province, and in Sumba island and West Manggarai in East Nusa Tenggara province, as well as the development of a logistics hub in Jakarta’s Tanjung Priok port, the country’s largest and busiest seaport.

“Investments in the renewable energy sector continue to be the priority of the Indonesian government to advance green and sustainable development,” he said at a joint press conference with Prime Minister Lee Hsien Loong at their Leaders’ Retreat in Bintan.

The two countries also hope to enhance their cooperation in the provision of low-carbon energy, through the facilitation of cross-border electricity trading and financing of low-carbon energy infrastructure.

The cooperation was formalised on Tuesday through the inking of a memorandum of understanding (MOU) on Bilateral Partnership on Green and Circular Economy Development, and an MOU on Energy Cooperation.

Mr Widodo noted that Singapore has been Indonesia’s top foreign direct investor, spending US$7.3 billion from January to September 2021.

Mr Lee said: “Singapore has consistently been Indonesia’s top foreign investor since 2014, and despite the pandemic, our investments have grown.”

He pointed out that the Kendal Industrial Park has attracted US$1.6 billion in investment and will create “many thousands of jobs”.

But the two countries have been exploring new areas of collaboration such as sustainability, the green economy, the digital economy and human capital development.

“And I’m happy that our officials are already meeting to discuss cooperation on sustainability,” Mr Lee added.

Indonesia has been scaling up its green energy plans as it sees renewables as a future driver of economic growth.

Meanwhile Singapore, which relies heavily on gas for power, has made plans to import around 30 per cent of its electricity from low carbon sources, such as renewable energy plants, by 2035, with Indonesia being among its potential suppliers.

Last October, Singapore’s companies inked two joint development agreements (JDA) to purchase solar energy from Indonesia.

The first was signed by Sembcorp Industries with utility company PT PLN Batam and renewable energy developer PT Trisurya Mitra Bersama (Suryagen).

Sembcorp will work on a large-scale integrated solar and energy storage project in Batam, Bintan and Karimun islands. It comprises around 1 gigawatt-peak (GWp) of solar power generation capability and an energy storage system to manage the intermittency for clean energy deployment and export.

The second JDA was inked by Singapore-based power generation and electricity retail company PacificLight Power (PLP) and a consortium consisting independent power producer Medco Power Indonesia and electricity company Gallant Venture, part of Salim group, for a 100 megawatt pilot solar power import project from Indonesia to Singapore.