Cooperating With South Korea To Accelerate Sustainable Green Investment, Bahlil: Please Come Bring Capital And Technology, We Facilitate

Minister of Investment/Head of BKPM Bahlil Lahadalia. (Photo: Doc. Antara)

JAKARTA - The Government of Indonesia is collaborating with the Government of South Korea in order to encourage an increase in sustainable green investment. Through this collaboration, the two countries will enhance and facilitate mutually beneficial cooperation activities.

This collaboration was marked by the signing of a memorandum of cooperation by the Minister of Investment/Head of BKPM Bahlil Lahadalia together with the Minister of Trade, Industry and Energy (MOTIE) of South Korea, Lee Chang-Yang on Thursday, July 28 in Seoul, South Korea. The signing was also witnessed directly by President Joko Widodo and President of the Republic of Korea Yoon Seok-yeol.

The Minister of Investment/Head of BKPM Bahlil Lahadalia is optimistic that this collaboration can accelerate the growth of sustainable green investment in Indonesia. Bahlil said that Indonesia and South Korea already have very good bilateral relations, especially regarding investment.

Bahlil said that his party is committed to consistently providing full support to South Korean investors from the start of licensing to supervision until the realization of their investment.

“This applies to potential investors as well as existing ones in Indonesia. Investors from South Korea are welcome to come, bring capital and technology, we are ready to facilitate it," he said in a written statement, quoted Friday, July 29.

Bahlil revealed that investors from South Korea have made a significant contribution to Indonesia in realizing economic transformation, which is manifested in the development of the electric vehicle ecosystem in Indonesia.

For your information, MOTIE will facilitate investment from South Korea that has the latest capital and technology to develop sustainable green investments, as well as provide appropriate technology support to be transferred to the Indonesian government and the private sector.

Meanwhile, MOTIE Minister Lee, Chang-Yang welcomed the establishment of cooperation with the Ministry of Investment / BKPM. Lee expressed optimism that the existing and future cooperation could have a positive impact on both parties, especially in the investment sector.

"We are very grateful to the Minister of Investment for the support and facilitation given to investors from South Korea so far. We are happy to be able to contribute to the development of green investment in Indonesia, and we hope that this cooperative relationship can continue to run and be mutually beneficial," said Lee.

For your information, this memorandum of cooperation between the Ministry of Investment / BKPM and MOTIE in addition to developing and transferring technology in sustainable green investment, is also related to the exchange of investment opportunities and relevant policies on the development of green investment, as well as promoting and facilitating investment cooperation activities engaged in industrial and green energy sectors, such as electric vehicle, battery, semi-conductor and renewable energy ecosystems.

Sustainable green investment in the form of developing an electric vehicle ecosystem from South Korea in Indonesia is realized through collaboration between a consortium of South Korean companies, which include LG, Hyundai, KIA, and Posco, and the Indonesian BUMN IBC (Indonesia Battery Corporation).

This collaboration includes the development of an integrated electric battery industry starting from nickel mining and smelting (smelter) located in Halmahera, North Maluku to the refining industry (refinery), precursor and cathode industries, as well as the expansion of the battery cell industry to be built at KIT Batang, Java. Central, to the electric battery recycling industry, with a total investment plan of Rp. 142 trillion.

The implementation of the first stage of groundbreaking for the construction of an electric vehicle battery cell factory was carried out in Karawang, West Java on September 15, 2021. Currently, the construction is entering the construction stage, which has realized 50-60 percent of the total target production capacity of 10 gigawatt with an investment of US$1.1 billion.

Meanwhile, on June 8, 2022, the construction of the second phase of the integrated electric battery industry has begun at KIT Batang, Central Java.

In addition, in the development of an electric vehicle production plant, Hyundai has also realized its investment of USD 1.5 billion in Cikarang, Bekasi Regency, West Java, which has started production since January 2022 with a current production capacity of 150,000 units per year.

Based on data from the Ministry of Investment/BKPM shows that South Korea itself is currently ranked 5th in the realization of investment in Indonesia by country for the period 2017 to the first semester of 2022 reaching 9.08 billion US dollars.

This value was dominated by investment in the manufacturing sector, namely the motor vehicle industry which reached US$1.7 billion; followed by electricity, gas, and water sector with 1.35 billion dollars; machinery, electronics, medical instruments, electrical equipment, precision, optics, and watch industries by 0.92 billion US dollars; leather goods and footwear industry by 0.86 billion US dollars; and the chemical and pharmaceutical industries of US$ 0.85 billion.