Indonesia Launches Phase Two of Downstreaming Program

Cilacap, Central Java – The second phase of Indonesia’s downstreaming program, encompassing 13 projects across the energy and mineral sectors, is underway with the goal of strengthening national energy security and creating up to 600,000 jobs, according to Rosan Roeslani, CEO of Danantara Investment Management Agency.

Roeslani made the announcement Wednesday during a groundbreaking ceremony for the projects at the Pertamina Patra Niaga Refinery Unit (RU) IV in Cilacap. He detailed that the projects include the construction of a coal processing facility designed to produce dimethyl ether (DME) as a substitute for Liquefied Petroleum Gas (LPG) imports.

“Around 80 percent of our LPG needs still come from imports. With this project, we want to reduce this dependence,” Roeslani stated.

This second phase builds upon an initial phase that included 11 locations, expanding the total number of downstreaming projects across strategic areas throughout Indonesia. The projects are divided into five in the energy sector, five in the mineral sector, and three focused on industrial and technology support.

Roeslani emphasized that all projects have undergone extensive review and planning, paving the way for swift implementation. A key benefit of the downstreaming program, he noted, is a significant reduction in imports, particularly within the energy sector.

“If we look at it, import reductions from these projects could reach around US$3.4 billion per year,” Roeslani said.

The projects are being spearheaded by various state-owned enterprises (SOEs), including Pertamina, MIND ID, and Krakatau Steel, with financial and logistical support from Danantara. Roeslani highlighted the collaborative nature of the initiative, stating, “What we have is a joint collaboration between SOEs, and we are encouraging the acceleration of previously planned projects as well.”

Looking ahead, the government plans to launch a third phase of downstreaming, potentially encompassing around six additional projects with an estimated investment value of approximately US$10 billion.

The downstreaming program aims to bolster Indonesia’s energy independence and strengthen its industrial base by processing raw materials domestically rather than exporting them. This initiative is part of a broader effort to enhance economic resilience and reduce reliance on foreign imports.