Indonesia Accelerates Hilirisasi Projects to Boost Economic Growth

Strategic Investments Across Multiple Sectors

The Indonesian government is pushing forward with 18 major hilirisasi projects valued at Rp618.13 trillion (approximately US$38.63 billion), with the aim of completing the feasibility studies by the end of 2025. These strategic projects span various sectors including minerals and coal (8 projects), energy transition (2 projects), energy security (2 projects), agriculture (3 projects), and marine-fisheries (3 projects).

National Priority and Economic Impact

These projects are part of Indonesia's broader strategy to accelerate industrialization and create significant employment opportunities across different regions. The initiatives are expected to generate over 270,000 quality jobs with better-than-regional minimum wage salaries. The program is being spearheaded by the Ministry of Energy and Mineral Resources (ESDM) in coordination with other government agencies and Danantara, the national investment management agency.

Key Project Highlights

1. Dimethyl Ether (DME) Project: A priority initiative aimed at reducing LPG import dependency by utilizing domestic gas production
2. Multi-sectoral Approach: Projects cover various industries from mineral processing to agricultural development
3. Significant Investment: Total investment of US$38.63 billion, excluding electric vehicle battery ecosystem
4. Job Creation: Expected to generate over 270,000 employment opportunities

Implementation Progress

The feasibility studies for these projects have been handed over to Danantara in July 2025. While the documents are still being refined, the government is confident about meeting the year-end target. Danantara, with its significant funding capacity, is responsible for further technical refinement and financial structuring of the projects.

International Collaboration

Danantara has already secured US$7 billion in funding commitments from various international sovereign wealth funds, including USD 4 billion from Qatar, USD 2 billion from China Investment Corporation, and investments from Russian Direct Investment Fund. Further discussions are ongoing with other global investors to support these strategic projects.

Economic Transformation

The successful implementation of these hilirisasi projects is expected to be a significant catalyst for Indonesia's economic transformation. By moving up the value chain through industrialization, the country aims to achieve greater economic independence and reduce its reliance on imported goods. The projects are also expected to contribute positively to the national balance of payments and strengthen Indonesia's position in global commodity markets.