Biodiesel Takes Hold in Indonesia

The U.S. agricultural attache foe the country reports the estimated investment value of the contracts is U.S. $12.4 billion. Another $2.8 billion will be financed by the national banks Bank Mandiri and BNI. The Indonesian government's bank interest subsidy program will support the financing. The Ministry of Energy and Mineral Resources hosted the event, which was attended by 7 governors and 18 county officials.

The agreements were signed by 52 foreign, local, and state-owned enterprises that are either planning to invest or have interest in investing in biofuel development in Indonesia. There were 12 financial institutions and 11 foreign-Indonesian joint ventures. Over a third were indicating interest in biofuel industry investment. 

Three ventures account for over half of the value of the agreements: CNOOC, the China National Offshore Oil Corporation, will invest $5.5 billion in PT. Sinar Mas Agro Resources and Technology Tbk and Hong Kong Energy; Genting Biofuel Asia Pte. Ltd. will invest $3 billion in PT. Pembangkit Jawa Bali and have the support of the government of Kabupaten Merauke to develop crude palm oil (CPO), sugarcane, and jatropha plantations and biofuel production plants; and Indomal Group, a joint Indonesia-Malaysia venture, will invest $1 billion to develop a CPO plantation and biodiesel production plant and have the support of the government of Kabupaten Sula Islands on North Maluku. Among the agreements, 7 are for research and development activities and 12 will involve local governments in their approach.\