Green Indonesian Industrial Park, A New Direction for Economic

Industrial Park in IndonesiaThe inauguration of the Green Economic Zone in Bulungan, North Kalimantan on Tuesday (12/21/2021) yesterday provided new market opportunities for investors to come to Indonesia. Part of this economic transformation has been implemented by the government. Thus that the Green Indonesian Industrial Park becomes a new identity.

Previously, Indonesia only focused on natural resources and exports of raw materials. In the future, we have to look at the more valuable downstream prospects. Thus, the export of Indonesian finished goods abroad has added value so that it affects the source of state income in the future.

Why Build a Green Industrial Park?

Joko Widodo (Indonesian President) explained that Indonesia only relies on the natural resources sector by exporting raw materials. Now, the focus must be on the downstream sector, which no longer only produces raw materials. However, industries located in the Indonesian Industrial Park (KIPI) must export semi-finished goods or finished goods.

This is to support the acceleration of the economy and provide added value so that it can become an independent and developed country. Moreover, the area is supported by the latest technology or hi-tech that will produce green goods that have been used and added value for the world market.

Initial Construction Cost USD 13 Billion

Coordinating Minister for Maritime Affairs and Investment “Luhut Binsar Panjaitan” said the initial project required US$ 13 billion in funds. The existing funds are allocated for the development of the Indonesian Industrial Park (KIPI).

The existing budget is for hydroelectric power (PLTA) which costs around USD 10 to 12 billion. In addition, the cost of supporting the Port area reaches USD 1 billion. Moreover, the coastal area is shallow, so that the port construction process leads to the depths of the sea.

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On the other hand, the role of political power is also very significant in achieving the success of the Kawasan Indonesian Industrial Estate (KIPI) and providing certainty to investors. Thus, the megaproject will be successful.

Requires an Investment Value of USD 132 Billion

Based on existing needs, the investment value of green industrial estates requires funds of USD 132 billion. This supports the targeted construction and commercialization stages over the next 8 years. At this stage, all costs are entrusted to the private sector and there is no guarantee from the Indonesian government.

The construction target is completed in 2024 and the operation process is gradual from 2023, 2024, to 2029 onwards. It is planned that several projects will be built through the area, ranging from silicon, polycrystalline, solar panels, new energy 1&2 batteries, steel, electronic alumina, aluminum smelters, and petrochemical industries.

The World’s Largest Green Industrial Area

The Indonesia Industrial Park (KIPI) area is the largest area in the world for the application of high-tech industry and clean production. The existing target is for a total land area of ​​30,000 hectares and the initial target is to build an area of ​​16,400 hectares first. The initial stage is the construction of hydropower, ports, and solar panels.

Everything is to support and accelerate industrial development with the expected goals. Meanwhile, the development of the green area industry still involves domestic investors, the United Arab Emirates, China, and other countries. This project has become a national strategic object that should not be late.

This supports the process of large-scale job creation and accelerates investors to invest in Green Industrial Estates in Indonesia.

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