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South Korean firms expected to make new investment in power plants, petrochemical

JAKARTA (RambuEnergy.com) – Indonesia expects to sign memorandum of understanding (MoUs) with South Korean companies to develop power plants worth around US$200 million, the Head of National Investment Coordinating Board (BKPM) Thomas T. Lembong said Tuesday (March 14).

“This week, our expectation is that there will be a number of MoUs that will be signed on power plant infrastructure projects worth around US$200 million,” Lembong told reporters on the sideline of Indonesia-Korea Business Summit.

The summit was attended by representative companies from South Korea and Indonesian major companies. He however declined to disclose the details of the MoU.

He however noted that the South Korean business people are eager to invest in Indonesia. At present, South Korean investment in Indonesia are mostly in steel, garment and petrochemical.

“We will encourage them to invest in new sector, such as in tourism in line with a rise of income per capita in Asia Pacific, which makes tourism industry to be more attractive,” he said.

Meanwhile, Lotte Chemical, a large petrochemical producer of South Korea, and other investors have voiced their desire to make new investments in Indonesia.

Former Indonesian Ambassador to South Korea John Prasetyo said there is currently great interest of South Korean businessmen and companies to invest in Indonesia in particular after South Korea’s relation with China is not at its best due to geopolitical issue with North Korea.

Lotte Chemical is also planning to expand its petrochemical business to Indonesia. Lotte Chemical, he said, has been in the past two years in talks to buy a land owned by Krakatau Steel in Cilegon and has secured the land in December last year. They (Lotte Chemical) may invest around US$4-5 billion in petrochemical projects.

President Joko Widodo said South Korea is already the third largest investor in Indonesia. “Korean companies are making very large contribution to our basic industries, such as in steel sector, petrochemical, shoe, garment and others, and employing more than 900,000 Indonesian workers,” the President said.’

The President asked the South Korean business to expand to other areas, such as creative sector of the economy. “I would like to invite you to make new step, by investing in creative and tourism industries.”

The President also offers investment opportunities in in infrastructure such as ports and airport, power plants and others, which are needed by this country to provide strong foundation for the future growth. (*)

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