Papua Projects Get Needed Push


FEBRUARY 27, 2015

Jakarta. Indonesia’s Investment Coordinating Board, or BKPM, has vowed to accelerate land clearing and power generation permits to support nine investment projects worth a combined $1.3 billion in Papua’s Special Economic Zones.

The projects — consisting of fishery, plantation and petrochemical developments in Merauke, Sorong, Teluk Bintuni and Raja Ampat — have been on hold for several years, due to land clearing issues and a lack power supply, Franky Sibarani, the BKPM chairman, said on Friday.

“One of the requirements to develop the Special Economic Zones is the availability of investors who are ready to place their investment,” he said in a statement in Jakarta.

“Currently the four Special Zones in Papua and West Papua have potential investors who have planned to invest but are still hampered in realization.”

Franky said the Indonesian government had long identified Papua and West Papua provinces as a priority for development, meaning the government will direct investors to develop the area before investing in other parts of Indonesia.

Franky noted that five investors had shown serious interest in investing a total Rp 9.8 trillion ($754 million) in the plantation sector and Rp 2.4 trillion in the oleochemical sector in Papua between October 2014 and February this year.

Foreign investment in Papua and West Papua in 2014 amounted to $1.41 billion, lower than 2013’s $2.41 billion.

Investment flowed into the mining sector, agriculture, food industry, storage, telecomunications and energy.

Indonesia saw foreign direct investment across all sectors, except oil and gas and banking, rise 14 percent to Rp 307 trillion up from Rp 270.4 trillion a year earlier.

The BKPM expects FDI — which accounts for about two-thirds of last year’s total investment — to grow to Rp 320 trillion this year.