Indonesia's potential as a primary destination for global investors, particularly in the energy transition sector, was emphasized by Coordinating Minister of Economic Affairs, Airlangga Hartarto. Airlangga made this statement following a meeting with the American Indonesian Chamber of Commerce (AICC). Minister Airlangga expressed optimism about Indonesia's appeal as an investment destination for energy transition, highlighted by the recent launch of a $400 million green bond by Citi Group to expand the green energy sector, especially geothermal energy, in Indonesia.
In terms of energy transition, Indonesia sees significant investment opportunities from the United States through the Partnership for Global Infrastructure and Investment (PGII). Coordinating Minister Airlangga stated, a commitment of $600 billion for sustainable infrastructure projects has been announced by PGII, with developing countries prioritized for investment. At the G20 Summit in Bali, two important announcements were made concerning Indonesia's energy transition. Firstly, the United States, Japan, the United Kingdom, France, Germany, Italy, Canada, Denmark, Norway, and the European Union, along with other members of the International Partner Group (IPG), will invest $20 billion, equivalent to IDR 300 trillion, to support Indonesia's energy transition. Secondly, the United States announced a joint project in the US-Indonesia partnership to establish Indonesia as the pioneer for Small Modular Reactors (SMR) in the ASEAN region, utilizing safe and reliable technology from NuScale Power.
The AICC meeting aimed to gain insights into the Indonesian government's perspectives on the potential global recession and the development of energy transition policies. Airlangga believes that an increasing number of US private sector entities will actively participate in Indonesia's energy transition initiatives, facilitated by favorable investment conditions. In 2022, Indonesia achieved a 5.31% economic growth, ranked second among G20 countries after Saudi Arabia, demonstrating high resilience, controlled inflation, and low recession risks. International financial institutions such as the International Monetary Fund (IMF) have expressed their appreciation for Indonesia's economic performance, which surpasses the global growth average.
