Executive Summary

Key insights and market outlook

The Indonesian government is accelerating 18 priority downstream projects worth approximately Rp 600 trillion (around USD 40 billion), with field work expected to commence in 2026 ⁴

. These projects, led by Minister of Energy and Mineral Resources Bahlil Lahadalia, focus on energy security and import substitution through initiatives like Dimethyl Ether (DME) production as an LPG substitute ¹. The projects are expected to boost economic growth and create new job opportunities while reducing reliance on imports.

Full Analysis

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Deep Dive Analysis

Indonesia's Ambitious Downstreaming Plans: 18 Priority Projects

Accelerating Energy Security Initiatives

The Indonesian government, under President Prabowo Subianto's leadership, is expediting 18 priority downstreaming projects with an estimated investment of approximately Rp 600 trillion (around USD 40 billion) ⁴

. These strategic initiatives are designed to enhance energy security, promote import substitution, and stimulate economic growth through various industrial downstreaming activities.

Key Project Focus Areas

Dimethyl Ether (DME) Production: One of the flagship projects involves developing DME as a cleaner alternative to LPG for household energy needs ¹
Source 1
https://industri.kontan.co.id/news/18-proyek-hilirisasi-ditargetkan-mulai-berjalan-tahun-2026-studi-kelayakan-dikebut
Energy Sector Downstreaming: Multiple projects focus on processing Indonesia's natural resources into higher-value products
Import Substitution Strategy: Reducing dependence on imported energy products through domestic production
Job Creation and Economic Growth: Expected to generate significant employment opportunities and stimulate economic activity

Implementation Timeline and Progress

The implementation plan for these projects is as follows:

2025: Completion of feasibility studies by Danantara, led by CEO Rosan Roeslani ²
Source 2
https://finance.detik.com/energi/d-8197892/proyek-hilirisasi-prioritas-dikebut-2026-pengganti-lpg-paling-depan
⁵
Source 5
https://finance.detik.com/industri/d-8197585/bahlil-ungkap-18-proyek-hilirisasi-prioritas-rp-16-t-mulai-digarap-2026
2026: Commencement of field work and project execution ¹
Source 1
https://industri.kontan.co.id/news/18-proyek-hilirisasi-ditargetkan-mulai-berjalan-tahun-2026-studi-kelayakan-dikebut
⁴
Source 4
https://finance.detik.com/infrastruktur/d-8197125/purbaya-bakal-kucurkan-rp-3-6-t-geber-penerbitan-1-200-rencana-tata-ruang
Short-term Impact: Creation of construction jobs and stimulation of related industries
Long-term Impact: Sustained economic growth through operational projects and reduced import dependency

Government Coordination and Support

The downstreaming task force, led by Minister Bahlil Lahadalia, is working closely with various government agencies and state-owned enterprises to ensure the successful implementation of these projects. The coordination involves ²

⁵:

Technical feasibility studies being conducted by Danantara
Financial support through government allocations and potential private sector partnerships
Regulatory framework adjustments to facilitate project execution

Economic and Strategic Significance

These downstreaming projects represent a significant step in Indonesia's economic development strategy, building on previous initiatives. The projects are expected to contribute positively to the national economy through: