The federal government will invest $50 million in Indonesian startups and SMEs in the energy transition and clean technology sector, as the Indonesian President calls for deeper electric vehicle supply chain collaboration.
The first tranche of the $200 million Australia-Indonesia Climate and Infrastructure Partnership – unveiled last June – will be invested in small-scale Indonesian investment funds that are supporting clean energy, climate technology and climate change projects, including carbon, capture, and storage and green energy smelters.
The partnership aims to attract more private sector capital to climate finance in Indonesia, with the Commonwealth forecasting that each $1 invested would attract an additional $3 of private capital.
The government also announced that Export Finance Australia would set up a US$200 million capital financing facility for energy transition projects with the Indonesian government-owned energy company PT Perusahaan Listrik Negara.
The announcements followed a bilateral meeting between Australian Prime Minister Anthony Albanese and Indonesian President Joko Wododo, during his three-day visit to Australia.
“There is a lot that Australia can offer Indonesia and the region in the energy transition, including a global move towards electric vehicles. We are reaching all of the components and the expertise needed for renewable energy,” Mr Albanese said.
Mr Wododo told the Australian media on Monday that he would push the Australian government for an agreement to deepen collaborative efforts in battery and electric vehicle manufacturing as Indonesia aims to become a global EV leader. However, no agreement has yet been signed.
“Since last year’s Annual Leaders’ Meeting in Bogor there have been many positive developments. And I thank you for your commitments. There are some future priorities that we need to do together,” he said.
“Among others first, Indonesia and Australia must build a more substantive and strategic economic cooperation through the joint production of EV batteries.”
The two leaders also welcomed a critical minerals investment plan of action signed between the Western Australian government and Indonesia’s Chamber of Commerce and Industry. The 2023-25 action plan seeks to develop resilient and sustainable supply chains, support strong environmental and social governance outcomes, and grow a skilled workforce.
The Prime Minister also announced that Western Sydney University, Deakin University and Central Queensland University would set up campuses in Indonesia.
Australia would also increase the duration of business visas for Indonesians from three to five years, and enable eligibility for the frequent traveler visa, which offers a 10 year visa validity.
Wednesday marked the third anniversary of the Australia-Indonesia free trade agreement, as two-way trade in goods and services grew to $23.3 billion in 2022.
President Widodo is scheduled to visit Australia again in March 2024 when Australia hosts the ASEAN Summit.
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