Sixty-seven contracts representing US$12.4 billion in investment for biofuels development in Indonesia were signed in a ceremony in Jakarta, Indonesia this morning. The signing, conducted under the auspices of a program called the Joint Initiative for Biofuel Development, was attended by 9 Ministers of the Indonesian government and was hosted by the Ministry of Energy and Mineral Resources.
The $12.4 billion in investments covers the entire range of activities from upstream (production) to downstream (sales), according to the Chairman of the National Team for Bioenergy Development, Al-Hilal Hamdi.
Chinese firms took the lead with China oil major China National Offshore Oil Company (CNOOC) and Hong Kong Energy partnering with Indonesian palm oil producer PT SMART Tbk in a US$5.5 billion investment. Malaysia-based Genting Energy is investing US$3 billion.
Among the Indonesian institutions involved with the MoUs are Bandung Institute of Technology (ITB), Bogor Institute of Agriculture (IPB), the Research and Development Division of the Ministry of Energy and Mineral Resources are also among the institutions that signed the MOUs.
“This is part of our efforts to promote the use of alternative energy,” Head of the Biofuel National Team Alhilal Hamdi said during the MoU signing ceremony.
Banks are also expected to disburse US$2.7 billion in loans to support local farmers in supporting the biofuels project. The loans are in addition to the planned investments.