Indonesia plans more than 20 energy projects worth around $40 billion in 2025

Indonesia plans more than 20 energy projects worth around $40 billion this year, its energy minister said Tuesday, as it tries to increase domestic refining capacity.

The projects include a bid to use coal to create an alternative to a popular imported cooking fuel, reports BSS.

Coal-dependent Indonesia, Southeast Asia’s largest economy, is one of the world’s top emitters but President Prabowo Subianto last year committed to phasing out coal power generation over 15 years and reaching net-zero emissions by mid-century.

“We have presented approximately 21 projects… with a total of around $40 billion investment,” energy minister Bahlil Lahadalia said in a statement published by the presidential palace Tuesday after he met Prabowo.

The projects are part of a bigger effort to grow Indonesia’s economy and create jobs by improving domestic capacity to refine commodities ranging from oil to nickel.

Among the plans is a project to use coal to produce dimethyl ether (DME) as a substitute for liquefied petroleum gas (LPG).

“We will do this so that the product can really be marketed domestically as an import substitute,” Bahlil said.

Most of the LPG sold domestically in Indonesia in 2023 was imported.

An oil refinery with a capacity of around 500,000 barrels and an oil storage facility will also be built, he said.

The projects will be funded in part by the archipelago’s new sovereign wealth fund Danantara, which launched last month to oversee more than $900 billion in assets, he said.

“What is clear is that the purpose of investment is to create quality jobs, create added value and increase state revenue and our national economic growth,” Bahlil said.

Recently inaugurated Prabowo has pledged to take Indonesia’s annual growth from five to eight percent, while ordering billions of dollars worth of cuts across government.

The government said Danantara would have an initial budget of $20 billion and Prabowo said last month it would be used on “20 or more high-impact national projects” this year.

Prabowo’s cuts, made to fund Danantara and other projects like an ambitious multi-billion-dollar free lunch programme, stoked student-led protests in multiple Indonesian cities last month.