Indonesia’s sovereign wealth fund INA on Tuesday announced a strategic partnership with the British International Investment (BII), the UK’s development finance institution and impact investor, to foster sustainable economic development and cooperation, especially in green sectors.
The partnership, which has been formalised in an Investment Framework Agreement (IFA), will focus on green infrastructure, renewable energy, climate resilience and adaptation, and related sectors.
Through the IFA, the parties intend to create a more enabling environment to facilitate investments and partnerships in private sector businesses in Indonesia which can allow them to have optimal risk-adjusted returns on invested capital and also cultivate sustainable economic growth and address global climate challenges.
“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,” said INA CEO Ridha DM Wirakusumah.
Owen Jenkins, British ambassador to Indonesia and Timor-Leste, said 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 collaboration with BII reaffirms the commitment of both countries to realise that ambition.
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.
Energy and transformation is one of INA’s priority investment sectors, especially in energy transition toward renewable energy in Indonesia. Earlier this year, INA made its first strategic investment in green energy through PT Pertamina Geothermal Energy (PGE) Tbk, the largest geothermal energy company in Indonesia.
INA also joined 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.
As part of its current 2022-2026 investment strategy, BII plans to invest up to £500 million in Southeast Asia, including Indonesia, 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.