BKPM TO PUSH REALIZATION OF 54 FDI PROJECTS WORTH $13.6 BILLION
Posted on August 22, 2015 on 10:59:34 WIB
The Investment Coordinating Board (BKPM) expects the acceleration of investment realization from dozens of ongoing foreign direct investment (FDI) projects to help trigger economic growth amid a slowdown, a top official says.
At least 54 FDI projects representing a planned investment of US$13.62 billion out of 100 prioritized projects show the biggest potential to be expedited for realization in the near future, BKPM data shows.
The board's plan is to focus on the 100 projects requiring a total planned investment worth Rp 219.6 trillion ($16.4 billion) as a sampling out of investment of roughly Rp 4.2 quadrillion in the pipeline between 2010 and 2015, according to BKPM head Franky Sibarani.
"The BKPM always supports investment that creates a positive impact on the economy, including import substitution and export-oriented industries, as evidenced by the 54 projects we monitor continuously," Franky said in a press conference on Friday.
Based on the board's monitoring, Franky said two out of the 54 projects had realized their investment worth a total $705.5 million in the downstream industries of mining and automotive components, while the remaining 52 were still under construction and worth $12.9 billion.
Out of the ongoing 52 projects, the board expects to see 22 to be realized before the end of this year and 20 next year, respectively, while the rest will be realized between 2017 and 2020.
"Most of the 22 projects scheduled to start production this year will occur in the fourth quarter," Franky said. Based on the board's assessment, Franky said the 54 projects were expected to help generate exports worth at least $3.33 billion per year, with two of them already posting total annual exports of $533.1 million from production in downstream mining and automotive sectors.
As most of the projects are import-substitution types, Franky said at least three of them under construction would help the state save its foreign exchange reserves in the future with import reduction expected to reach up to $1.15 billion per year from petrochemical, raw textile yarn and steel manufacturers.
The 54 monitored projects were also expected to help increase electricity supply as several of them are power plants with a total capacity of 3,748 megawatts (MW), with 130 MW of them already realized, Franky said.
Franky said further that the 54 projects were expected to absorb 43,444 workers, with two of them already employing 9,280 people.
"All of the projects are quite widespread across the country, such as East Java and North Sumatra, with eight and five projects as well as Papua with another three," Franky added.
In addition, Franky said the board planned to continue taking samples of another 100 projects each month to find a larger prospective picture of the Rp 4.2 quadrillion investment pipeline.
The 100 prioritized projects under close monitoring include seven sectors — industry, power plant, plantation, mining services, transportation, tourism and farming — with total realized investment of Rp 80.7 trillion out of the planned Rp 219.6 trillion.
The efforts to push prioritized projects are expected to help the board achieve its target to attract at least Rp 3.5 quadrillion of realized investments in five years time, with Rp 519.5 trillion expected in this year only.
The country needs a boost in foreign and domestic investment as its economy shrank to 4.7 percent in the first quarter of this year, the lowest level since 2009.
Despite the weak growth, Franky said the expected realization of those 54 projects would not be thwarted by negative sentiments locally and globally, pointing out that "most of the investors are long-term type who view Indonesia as economically resilient with stable politics and security, despite the current challenges, such as rupiah depreciation."