Jakarta – The government is committed to increasing investment to accelerate industrial downstreaming in various strategic sectors. The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia revealed that massive investment has been prepared to support this program.
“We have decided, (investment) downstreaming targeted approximately USD618 billion for 2025,” said Bahlil.
In the initial stage, the government will launch 21 projects with a total investment reaching USD40 billion. Several projects will receive funding from the Daya Anagata Nusantara Investment Management Agency (BPI Danantara).
Bahlil detailed a number of downstreaming projects that will soon be underway. One of them is the construction of an oil storage facility on Nipah Island which is expected to increase national energy security. This storage is targeted to be able to meet national energy needs for 30 days, in accordance with the mandate of the Presidential Regulation.
In addition, the government will build an oil refining facility with a capacity of 500 thousand barrels per day, making it one of the largest in Indonesia. This project aims to stabilize domestic energy supplies and reduce dependence on imports.
In the coal gasification sector, the government is targeting the production of dimethyl ether (DME) as a substitute for LPG. This project will be developed in South Sumatra, East Kalimantan, and South Kalimantan with a domestic resource-based approach.
In line with President Prabowo’s policy, the government has set 26 commodity sectors as national downstream priorities. These sectors include minerals, oil and gas, fisheries, agriculture, plantations, and forestry.
CORE Indonesia economist Muhammad Faisal assessed this policy as a positive step.
Downstreaming not only increases added value, but also has an impact on job creation, he said. However, he reminded of the need for improvements from previous experiences, especially regarding the relationship between industry and the local economy and environmental aspects.
Faisal also highlighted the importance of considering market demand before developing the downstream industry.
We don’t want to create products that later have no buyers, he said.
Despite challenges such as the United States’ protectionist policies, Faisal is optimistic that the downstream market remains broad, both domestically and abroad.
He emphasized that protectionist policies are more targeted at countries such as China, Mexico, Canada, and Vietnam, while Indonesia still has great potential to develop.