Indonesian Government Accelerates Industrial Hilirization with US$ 40 Billion Investment
The Indonesian government is increasingly aggressive in accelerating industrial downstreaming as an effort to strengthen national energy security, create new jobs, and drive sustainable economic growth. In a meeting chaired by President Prabowo Subianto at Merdeka Palace, Jakarta, on March 3, 2025, it was agreed that 21 first phase downstream projects would be realized immediately. With a total investment of US$40 billion, these projects are part of the national downstream investment target projected to reach US$618 billion by 2025.
Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, stated that the agreed projects cover various strategic sectors that have a significant impact on the national economy. During the meeting, the government discussed in depth the various projects that will be executed immediately to ensure that the downstream industry runs optimally. With this massive investment, Indonesia is expected to reduce dependence on imported products and increase added value to domestic natural resources.
Hilirization Focus on Energy, Mining, and Agriculture Sector
The government’s downstream industry includes several key sectors that play a crucial role in the national economy. One of the flagship projects is the construction of an oil storage facility on Nipah Island that aims to improve national energy security. In addition, the government will also build an oil refinery with a capacity of 500,000 barrels per day designed to reduce dependence on crude oil imports and ensure energy availability for domestic industries.
In the coal gasification sector, the government targets the production of Dimethyl Ether (DME) as an alternative substitute for LPG to reduce dependence on imported fuel. The project will optimally utilize domestic resources without relying on foreign investment. DME development will be focused in several strategic areas such as South Sumatra, East Kalimantan, and South Kalimantan to ensure more equitable energy distribution. In addition, the government will also accelerate the downstreaming of the mining sector by encouraging the processing of copper, nickel, and bauxite into value-added products such as alumina.
President Prabowo has set 26 commodity sectors as national downstream priorities, including the mineral industry, oil and gas, fisheries, agriculture, plantations, and forestry. This step is believed to accelerate the transformation of Indonesia’s economy towards a natural resource-based industrialized country that has the power to transform its economy.
Impact of Downstream Investment for Foreign Investors in Bali and Eastern Indonesia
This large investment in downstream industrial projects is predicted to have a significant impact on foreign investors, especially in Bali and Eastern Indonesia. With the development of energy and industrial infrastructure, foreign investors will be increasingly interested in investing their capital in various developing sectors. The downstreaming of mining and energy will create new supply chains that open up investment opportunities in manufacturing, logistics services, and other supporting industries.
In Bali, the growth of the green industry sector driven by downstreaming will open up opportunities for investors in the development of renewable energy, ecotourism, and sustainability-based property sectors. Meanwhile, in Eastern Indonesia, downstream projects can increase the economic value of abundant natural resources, encouraging investors to participate in locally-based processing industries. With conducive policy support, increasingly transparent regulations, and attractive fiscal incentives, the government is optimistic that these projects will strengthen Indonesia’s position as a competitive investment destination in the Asia-Pacific region.
Disclaimer
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
Bali has long been a prime destination for investors, but as the island continues to grow, new locations are emerging as attractive opportunities. One such place is Candidasa, a hidden
Indonesia offers a dynamic business environment for foreign investors, particularly in emerging markets such as Bali, Lombok, and Sumba. Many entrepreneurs looking to start a business in Bali or explore
Understanding Indonesia’s Foreign Investment Regulations. Indonesia is an attractive destination for foreign investors, but strict regulations govern how they can operate. According to Law No. 25 of 2007 on Investment,
Bali's Stunning Natural Beauty at Affordable Prices Bali has long been known as a top tourist destination that offers exceptional natural beauty and memorable vacation experiences at very affordable prices.
The property industry in Indonesia continues to grow rapidly along with the increasing demand for flexible housing and modern co-working spaces. Co-living and co-working concepts are increasingly popular among digital
prev
next
INDONED CONSULTANCY
The Indoned Team is committed to driving societal change and promoting environmental sustainability. Working in innovative ways with government, non-profit organizations, and civil society, we are designing and delivering solutions that contribute to a sustainable and prosperous future for all.
