Indonesia courts Japan with green mega projects

hartono · May 26, 2026

Indonesia courts Japan with green mega projects

Maria Renata Hutagalung, deputy chief of mission at the Indonesian Embassy in Tokyo. (ANTARA/HO-KBRI Tokyo)

Jakarta (ANTARA) - Indonesia offered Japanese investors a series of strategic projects, including a tin downstream processing hub in East Java and the Giant Sea Wall project, during the Indonesia-Japan Investment Forum 2026.

Maria Renata Hutagalung, deputy chief of mission at the Indonesian Embassy in Tokyo, said the two countries are pursuing new growth engines focused on greener and more resilient development models.

Japan is Indonesia’s fifth-largest foreign investor and has helped create more than 278,000 jobs while supporting the country’s industrial downstreaming and energy transition agenda, Renata said in a statement Tuesday.

Indonesia also promoted the Industropolis Batang Special Economic Zone, a high-technology industrial hub targeting electric vehicles, data centers, and advanced manufacturing industries.

Another project offered to Japanese investors was a biomass energy facility in Grobogan, Central Java, which would convert corn agricultural waste into renewable energy.

The Grobogan project carries an estimated capital expenditure of US$15.5 million and has attracted interest from Japanese industrial group Kobelco for further discussions, according to the statement.

Cahyo Purnomo, director for East Asia, South Asia, Middle East, and Africa investment promotion at the Investment Ministry, said Japanese foreign direct investment in Indonesia reached US$18.1 billion between 2021 and the first quarter of 2026.

Annual investment growth averaged 13.2 percent during the period, underscoring sustained Japanese investor interest in Southeast Asia’s largest economy, Cahyo said.

Still, he noted that 94 percent of Japanese investment projects remain concentrated on Java island, highlighting persistent regional imbalances in economic development.

Indonesia is now intensifying efforts to encourage Japanese companies to expand investment into regions outside Java, particularly in resource processing and renewable energy industries.

The investment forum also generated fresh business commitments from Japanese companies, signaling continued confidence in Indonesia’s long-term economic prospects.

Pongamia Co. Ltd. announced plans to invest in renewable energy through the development of pongamia plantations in Indonesia to produce biodiesel and sustainable aviation fuel.

Separately, Onoda Inc. plans to assemble Japanese ultrasonic gas meter equipment in Indonesia to support the government’s expansion of household gas network infrastructure.

Indonesia has increasingly positioned industrial downstreaming, renewable energy, and large-scale infrastructure as central pillars of its strategy to attract foreign investment and strengthen long-term economic growth.