National Bank Reluctant To Finance Smelter Project, Bahlil: Even Though It's Fast To Return Capital

Investment Minister Bahlil Lahadalia (Photo: dock. VOI)

JAKARTA - Investment Minister/Head of BKPM Bahlil Lahadalia quipped that national banks are still reluctant to finance the development of the mining industry. In fact, he said, IRR to build nickel smelters is a break-event or break-event points (BEP) only takes 6 years from investment.

My question is why banks don't want to see this? Banking only wants to see a standby loan credit. Even though this is very good. Where is there a 5-6 year business investment break event point. This is a challenge for us," he said at the BNI Investor Daily Summit 2023, in Jakarta, Wednesday, October 25.

Bahlil revealed that currently the majority mining business license (IUP) is held by Indonesians. But, he said, the industry is held by foreigners.

"I gave an example of 80 percent nickel IUP nickel belonging to an Indonesian person, not a foreign IUP. Which one is owned by foreigners, namely the industry, the smelter. The smelter is owned by foreigners. Why? Because it is foreign banking that wants to finance the industrial development," he said.

Furthermore, Bahlil said that the criticism submitted by economists regarding downstreaming in Indonesia was only controlled by foreigners. But also not completely wrong.

The results of foreign exchange rather than downstream are mostly used by foreigners, I want to say that it is true, there is no right too. The truth is that he has to pay back debts and interest because the credit is all foreign credit. But for that benefit all goes to Indonesia, "he explained.

Seeing this condition, Bahlil also suggested that national banks with national investors collaborate to build strategic industries in the country.

"Because of that, the opurtunity is very good," he said.