By: Agus Soepomo
Downstreaming and renewable energy development are two main pillars in Indonesia’s future economic growth strategy. In facing the era of globalization and industrial transformation, the government is committed to continuing to encourage investment in these two sectors in order to achieve an investment target of IDR 13,032 trillion in the next five years.
This step was taken to strengthen the foundation of the national economy and increase Indonesia’s competitiveness in the global arena. With downstreaming and renewable energy as the main focus, it is hoped that national economic growth can reach 8 percent in the next few years.
In the 2025-2029 period, industrial downstreaming is projected to contribute around 23 to 24 percent of total investment. This investment includes both domestic investment and foreign direct investment.
The Minister of Investment and Downstreaming who also serves as CEO of BPI Danantara, Rosan Roeslani, emphasized that the downstreaming strategy is not only limited to the mineral sector. The government is also trying to expand downstreaming to the agriculture, fisheries, and plantation sectors in order to create greater added value for the national economy.
In line with the government’s vision to achieve the net zero emission target by 2060, investment in the renewable energy sector also continues to be encouraged. Until now, the installed capacity of renewable energy in Indonesia is still relatively low, which is only 14.43 gigawatts, far from the potential of 3,700 gigawatts.
Therefore, the government is committed to accelerating the development of solar, hydro, and geothermal energy, considering that geothermal in Java and Sumatra has the largest reserves in the world. This great potential must be utilized optimally in order to realize national energy security and reduce dependence on fossil energy.
In an effort to optimize this investment strategy, the government will maximize the role of the Daya Anagata Nusantara Investment Management Agency (Danantara). This institution is expected to attract more investment from the private sector and provide certainty to domestic and international investors.
Rosan Roeslani explained that Danantara is not only making its own investments, but also acts as a facilitator inviting national and foreign investors to collaborate in developing strategic sectors.
The downstreaming and investment program has received broad support from various parties, including member of Commission XII of the Indonesian House of Representatives, Christiany Eugenia Tetty Paruntu. She emphasized that downstreaming is an important strategy in achieving national energy and food security. By opening up more inclusive, equitable, and sustainable employment opportunities, downstreaming has the potential to significantly improve people’s welfare. Indonesia has great potential in the energy and maritime sectors, which if utilized optimally, can strengthen the green economy and environmentally friendly blue economy.
However, the implementation of downstreaming also faces various challenges, including the need for strong regulatory support from the central and regional governments. Collaboration between various stakeholders is needed to create a conducive business ecosystem. With the right regulations and adequate infrastructure support, downstreaming can run more effectively and provide maximum benefits for the national economy.
The Minister of Energy and Mineral Resources, Bahlil Lahadalia, stated that the government has prepared a large investment to encourage downstreaming in strategic sectors, such as oil and gas, mining, agriculture, and maritime affairs. This plan includes the implementation of 21 priority downstreaming projects that are directly directed by President Prabowo Subianto.
The President emphasized the importance of these projects in creating extensive employment opportunities by combining advanced technology and labor-intensive labor. In addition, downstream projects must also prioritize import substitution industries so that Indonesia is more independent in meeting domestic needs.
Downstreaming and development of renewable energy are not only short-term strategies to increase investment, but are also the main foundation for sustainable and independent economic growth. With downstreaming, Indonesia will not only become an exporter of raw materials, but also a producer of value-added products that are able to compete in the global market. Renewable energy, on the other hand, is the main solution to ensure national energy security while reducing dependence on increasingly depleting fossil fuels.
Investment in these two sectors must continue to be encouraged with regulations that support sustainability and inclusivity. The government, investors, and the community must collaborate so that the benefits of downstreaming and renewable energy can be felt evenly throughout Indonesia. With equal investment, employment opportunities will be more open, and economic growth will beonomy is no longer centered only in big cities, but also evenly distributed to remote areas.
In the future, Indonesia’s success in developing downstream and renewable energy will determine its position in the global economy. With abundant resources and the right policies, Indonesia has a great opportunity to become a major player in the green industry and value-added industry. Therefore, supporting downstream and energy transition is not only in the government’s interest, but also in the common interest for a stronger, more competitive, and more sustainable economic future.
*) Economic Policy Consultant – People’s Economic Forum
