G20 Attracts New EV Investment to Indonesia

Indonesia has attracted new investment into the electric vehicle (EV) sector, coinciding with the Group of G20 forum, where global leaders and businesses agreed on commitments to lower carbon emissions.

Indonesia Investment Authority (INA), Contemporary Amperex Technology Co. Ltd. (CATL) and CMB International Capital Corporation Ltd. (CMBI) signed a memorandum of understanding (MoU) on Monday to establish a Green Fund, which they will jointly invest in. The fund, which is expected to grow up to US$2 billion, will focus on EV value chain investment primarily in Indonesia from downstream to upstream. In addition, Chinese conglomerate Envision Energy is set to enter Indonesia’s EV battery industry, particularly in the area of raw materials.

“Electrification is an attractive solution for conventional energy in helping to reduce the environmental impact while also tapping into a potential growth market,” INA CEO Ridha Wirakusumah said in a statement.

Indonesia possesses roughly a quarter of the world’s nickel reserves amounting 21 million tonnes on a par with Australia that holds the same amount, followed by Brazil and Russia, according to the United States Geological Survey (USGS). Indonesia is expected to emerge as a global nickel hub with nearly half of the globe’s refined nickel to be supplied by Indonesia by 2030.

The fund and the Chinese firm added to a long list of investments drawn to Indonesia, as more businesses sought to harness the country’s EV ecosystem potential, along with Foxconn and Hyundai, among many others.

State-Owned Enterprises (SOEs) Minister Erick Thohir lauded the recent INA cooperation with several investors. He added that SOEs too have caught the opportunity by forming Indonesia Battery Corporation (IBC), a joint venture from four mining and energy state-run firms, that focuses on developing the country’s EV ecosystem.