Indonesia Gets US$2.5bn Investment from Australia's Energy Project

TEMPO.CO, Jakarta - Australian company Sun Cable is building a renewable energy infrastructure project—claimed to be the largest in the world—with Singapore as its main market. Sun Cable will involve Indonesia in the project dubbed Australia Asia Powerlink or AA Powerlink, which has an investment value of US$ 2.5 billion.

"Sun Cable's decision to invest more than US$2 billion proves that Indonesia is a trusted partner and a strategic investment location for the international community," Coordinating Minister for Maritime Affairs and Investment Affairs Luhut Binsar Pandjaitan said in a press conference, Thursday, September 23.

Collaborating with the government of Indonesia, Sun Cable will invest to create jobs and facilitate knowledge and innovation exchanges.

Sun Cable signed a memorandum of understanding with the Bogor Agricultural University and the November 10 Institute of Technology for the provision of scholarships and research grants in the field of future energy. The company plans to support the Indonesian economy by creating 7,500 jobs.

For the AA Powerlink project, Sun Cable is open to the possibility of procuring renewable energy infrastructure components as well as energy storage from local businesses.

This project is touted to push Indonesia into becoming a major hub for the infrastructure manufacturing supply chain of renewable energy. Indonesia will also integrate technologies such as solar power, energy storage, and submarine cable transmission systems spanning 4,200 kilometers.

Luhut said the project would pass through the Indonesian territory, complying with local regulations as set out in the Maritime Affairs and Fisheries Minister's Decree No.14/2021 on Pipelines and/or Underwater Cables.

Sun Cable CEO David Griffin said the investment in Indonesia comprises US$1 billion for procuring equipment and services, and US$1.5 billion for project expenses. The investment value may increase along with the project's progress.

"With the potential of lithium battery materials in Indonesia, there is an opportunity to procure electric batteries for manufacturing companies in Indonesia worth US$600 million or around Rp8.5 trillion rupiah," Griffin said.

Read: Global Investor Trust in Indonesia Improving: Investment Minister

Francisca Christy Rosana