Integrated Investment Projects in Indonesia: North Sulawesi
Thomas Lembong, Head of the Indonesia Investment Coordinating Board (BKPM), said he wants Indonesia to tap the momentum of the recent "One Belt, One Road" summit in Beijing (China), organized earlier this month, by promoting three Indonesian provinces to foreign investors as a great investment destination. These three provinces are North Sumatra, North Kalimantan, and North Sulawesi.
According to Lembong these three provinces have a great strategic location, being gateways for seaborne trade but they also contain plenty of opportunities for the development of sectors such as tourism and infrastructure. In fact, for the Indonesian government infrastructure development is placed high on the agenda because enhanced connectivity should result in a better investment climate (by reducing logistics costs), hence attracting more investors.
Therefore, the government offers various infrastructure projects in the aforementioned provinces to the private sector. However, Lembong adds these projects will be offered as a comprehensive investment project, meaning it will not involve one project but a series of integrated and related projects. For example harbor, toll road and power plant development projects are combined with projects related to the manufacturing industry and tourism.
Lembong spoke these words at the Manado International Conference on Tourism that was held earlier this week. Local authorities in North Sulawesi are eager to turn the city of Manado (the capital of North Sulawesi) into the tourist center of eastern Indonesia. The regional government of North Sulawesi now offers six investment projects to investors:
• Manado-Bitung railway
• Special economic zone of Likupang
• 28 kilometer-long road to Likupang
• Tram-line within Manado city (connecting Wori-Tateli)
• Manado dam
• Landfill (for waste material)
During the Manado International Conference on Tourism a total of USD $400 million in investment commitments were received from foreign and domestic investors, most originating from the development of hotels, apartments, a shopping mall and diving center in South Manado.
Meanwhile, Lembong also said he hopes Indonesia's recent credit rating upgrade (from S&P) will result in more funds flowing to the real sector. However, he admits this will require time because the rating upgrade will first impact on portfolio investments. Later part of these funds should be channeled to the real sector as companies have more funds to invest in business expansion.
Foreign Direct Investment Realization in 2016:
| Province | Investment (in USD million) |
Number of Projects |
| North Sulawesi | 64.5 | 63 |
| North Kalimantan | 160.8 | 65 |
| North Sumatra | 1,014.7 | 688 |
Domestic Direct Investment Realization in 2016:
| Province | Investment (in IDR billion) |
Number of Projects |
| North Sulawesi | 4,905.3 | 15 |
| North Kalimantan | 3,345.7 | 56 |
| North Sumatra | 2,685.2 | 87 |
Source: BKPM
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