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January 14, 2020updated 15 Jan 2020 4:44pm

UAE to invest $3bn in Indonesia’s energy infrastructure

The United Arab Emirates (UAE) will invest US$3bn in energy projects ranging from oil refineries to infrastructure for electricity in Indonesia through a sovereign wealth fund set up by President Joko Widodo.

By Matt Farmer and Yoana Cholteeva

The United Arab Emirates (UAE) will invest US$3bn in energy projects ranging from oil refineries to infrastructure for electricity in Indonesia through a sovereign wealth fund set up by President Joko Widodo.

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The Emirati companies will be equity investors partnering with Indonesian state-owned and private companies.

The deals include the Indonesian state-owned oil and natural gas corporation, Pertamina, upgrading a refinery for the Abu Dhabi National Oil Co (ADNOC). Pertamina will also sign a deal to buy between 170,000 tons and 520,000 tons of liquefied petroleum gas from ADNOC.

Indonesia’s state mining company Inalum and Emirates Global Aluminum will start a pilot project to increase Inalum’s production capacity.

Among the Indonesian partners in the projects will also be state utility PLN and private entities Maspion Group and Chandra Asri Petrochemical with no exact timeframe for funds given.

Indonesian President Widodo  gave a keynote speech at a sustainability conference in the UEA. While in the country, he met with Crown Prince Sheikh Mohamed bin Zayed to oversee the signing of 16 deals, including 11 oil and gas, petrochemical, port and telecommunications deals totaling US$22.89bn.

President Widodo “appreciates the significant progress in the bilateral cooperation between Indonesia and the United Arab Emirates”, according to a statement from Indonesia’s presidential secretariat, as the president is hoping for even closer relations between the two countries in the future.

A presidential secretariat spokesperson said: “The UAE would remain one of Indonesia’s key economic partners, especially in the investment sector.”

The president also invited the crown prince to join the steering board to build Indonesia’s new capital, according to the statement.

ADNOC also signed a memorandum of understanding (MOU) with Chandra Asri Petrochemicals to investigate supplying naphtha as a feedstock for current and future cracking processes in Indonesia.

The UAE minister of state and ADNOC CEO Sultan Ahmed Al Jaber said: “The agreements signed with Pertamina and Chandra Asri will potentially help ADNOC to secure additional in-market presence in one of Southeast Asia’s fastest-growing economies, enabling new domestic value-creation opportunities across the hydrocarbon chain.”

As President Widodo has previously expressed regrets that Indonesia had not built a new oil refinery in the past 30 years, he takes a personal interest in programmes supporting new oil refineries and reinforcing existing ones.

Widodo’s government has been focused on tackling Indonesia’s widening current account deficit, which totalled US$31.1bn in 2018 and it is a result of rising fuel imports and capital goods purchases.

In 2019, UAE companies such as Abu Dhabi National Oil and Mubadala were among the ones which signed agreements with Indonesian firms to participate in investments in various sectors, including oil and gas.

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How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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