UAE, Indonesia consider US$5 bn energy deal

Discussions regarding a possible US$5 billion energy partnership between the United Arab Emirates (UAE) Energy Minister Suhail Mohammed Faraj Al Mazrouei and Indonesian President Joko Widodo (Jokowi) are underway.

“We know that currently the world energy market is undergoing some transformation. Of course, changes have been made with sustainable and renewable energy,” Jokowi said while receiving Al Mazrouei at the Merdeka Palace in Indonesia recently.

Accompanied by Coordinating Minister for the Economy Darmin Nasution and Energy and Mineral Resources (ESDM) Deputy Minister Arcandra Tahar, Jokowi also talked about energy cooperation in the upstream sector.

Meanwhile, Tahar explained that UAE intended to invest in Indonesia, where the current investment value is still less than US$2 billion.The ESDM deputy minister said the potential energy investment could be increased up to US$5 billion and included several areas of cooperation.

“Some of the investment discussed is in the upstream sector. Mubadala desires to invest in Indonesia in the upstream sector and work with Pertamina,” Tahar stated.

The UAE delegation also invited Pertamina to cooperate on investment in Abu Dhabi and Dubai.

The UAE has asked Indonesia to immediately adopt investment protection before entering international bilateral cooperation. According to Tahar, investment protection guarantee is commonly done between countries that work together bilaterally.

“It’s about the possibility of nationalization; there is a possibility of Indonesia not nationalizing the company,” Tahar remarked about the investment.

Minister Al Mazrouei, noted Tahar, also submitted a request to Indonesia to provide tax incentives to cut double taxation in the bilateral cooperation.

On the occasion, the president and the UAE delegation also discussed the potential for electricity cooperation in Indonesia to utilize environment friendly energy.”We are also talking about Masdar, a company from the UAE, who wants to invest in renewable energy, including PLTS, solar power plants,” said Tahar.

Masdar, added Tahar, has discussed it with state-owned electricity company PLN, so the government will have to follow up on the potential cooperation.

For cooperation other than in energy, Indonesia and the UAE also discussed cooperation in port infrastructure.The potential cooperation in this sector will be explored by Dubai Port World with state-owned port operator companies PT Pelindo I and Pelindo III.

“In addition, we also suggested that it would be good if investment in Indonesia is made in cooperation with local companies, so that cooperation will be mutually beneficial,” revealed Tahar.

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