In a significant step toward enhancing bilateral investment ties between Indonesia and the United Kingdom, Indonesia Investment Authority (INA), the sovereign wealth fund of Indonesia, and British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, today announced a strategic partnership aimed at fostering sustainable economic development and cooperation.
The partnership, which has been formalised through the execution of an Investment Framework Agreement (“IFA”) between the two entities, will focus specifically within the spheres of green infrastructure, renewable energy, climate resilience and adaptation and related sectors. The IFA was signed in Jakarta by INA Chief Executive Officer, Ridha Wirakusumah, and BII Chief Executive Officer, Nick O’Donohoe.
The partnership underlines the synergy between INA’s dedication and BII’s investment focus to mobilise capital and catalyse select green sectors in Indonesia to achieve development objectives on improved productivity, sustainability and inclusion. Through this IFA, the parties intend to facilitate an environment for investments and partnerships in private sector businesses in Indonesia. Leveraging their combined strengths, experience, networks and a shared vision, the partnership is poised not only to seek optimal risk-adjusted returns on invested capital, but also to cultivate sustainable economic growth and address global climate challenges.
INA has designated green energy and transformation as one of its priority investment sectors. Earlier this year, INA made its first strategic investment in green energy through PT Pertamina Geothermal Energy (PGE), the largest geothermal energy company in Indonesia. Additionally, INA joined forces with Contemporary Amperex Technology Co., Limited (CATL) to establish a Green Electric Vehicle (EV) Fund that will concentrate on end-to-end EV value chain investment, primarily in Indonesia, reflecting INA’s dedication to support Indonesia’s sustainability and commitment to net zero carbon emissions by 2060.
In synergy, BII with its 75 years’ experience of investing in emerging economies, is committed to boosting climate finance in the region. As part of its 2022-2026 investment strategy, BII re-entered South-East Asia including Indonesia with plans to invest up to £500 million across the capital structure to support the region’s green energy transition. This commitment was recently demonstrated through BII’s $15 million investment to the SUSI Asia Energy Transition Fund (SAETF), a Southeast Asia-focused energy transition infrastructure fund. In Indonesia, the Fund has invested in the development of run-of-river hydropower and wind projects via a joint venture between SAETF and regional developer Pacific Impact. This reiterates the DFI’s renewed commitment to investing in climate finance in Indonesia, as one of BII’s priority markets in Southeast Asia.
Speaking about the partnership, Ridha Wirakusumah, INA’s CEO said, “This partnership marks a significant step in INA’s mission to serve as a catalyst for Indonesia’s future growth and prosperity. Collaborating with a leading development finance institution like BII strengthens our dedication to supporting sustainable development throughout Indonesia. This strategic alliance will bolster our commitment to green investment, which is pivotal for sustainable and inclusive growth.”
British Ambassador to Indonesia and Timor-Leste Owen Jenkins said: “This new partnership between BII and INA is the latest demonstration of the UK’s commitment to work with Indonesia on green investment opportunities, creating jobs and putting UK expertise at the heart of tackling climate change and supporting social, economic and environmental benefits. As one of BII’s priority markets in Southeast Asia, Indonesia has the potential to become an international climate leader as it continues to accelerate low carbon energy transition. INA’s collaborations with BII reaffirms the commitment of both countries to realise that ambition.”
Nick O’Donohoe, BII’s CEO shared, “We are very excited by this partnership with INA as it will not only further our ambitions to provide climate finance in the region but also support Indonesia to accelerate its energy transition goals. With a shared vision to catalyse investment in the private sector to drive sustainable economic growth, we look forward to working with INA to support local businesses that are the forefront of innovations to mitigate climate change as well as increase climate resilience and adaptation.”
The collaboration signals a new chapter in the economic relationship between Indonesia and the UK, with potential for substantial mutual benefits. It aims to create pathways for resilient and sustainable economic growth, offering a platform for innovation and synergy in investments between the two nations. As plans are further solidified, details of the joint investments will be announced in due course.
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British International Investment media contact: press@bii.co.uk
