Indonesia has received an investment commitment amounting to US$500 million, or IDR 7.5 trillion, to build a solar panel and module manufacturing industry with a capacity of 5 gigawatts (GW) in the Batang Integrated Industrial Area (KITB), Central Java, Investment Minister Bahlil Lahadalia said in a press release. 

The commitment was inked on the Pre-Cooperation Agreement between SEG Solar Inc., an energy company from Houston, United States (US), and ATW Group with KITB on Friday, June 23, at the Indonesian Embassy in Washington, DC. 

A day after his visit to the US, Mr. Bahlil said that the signing of this collaboration is part of the Indonesian government's efforts to "boost its energy transition".  

Mr. Bahlil said his visit also aimed to attract US companies’ attention amid their increasing interest in green energy investment, considering the 2022 US Inflation Reduction Act (IRA) has been in effect since 2022.  

"The signing of this cooperation is part of the Indonesian government's efforts to encourage the energy transition and also the initial process to encourage openness between our country and the US government. We come to the US to convince American investors to invest in Indonesia." Mr. Bahlil said this, as quoted by Antara News. 

The Indonesian Ambassador to the US, Rosan Perkasa Roeslani, said the cooperation will soon be executed next year. 

"It will not only contribute to economic growth but also support the energy transition and create jobs," Mr. Rosan added.  

The US ranks 6th in terms of investment realization in Indonesia, with a total investment of $9.4 billion during the period from 2018 to the first quarter of 2023. The most dominant investment sectors are mining, utilities (electricity, gas, and water), the chemical and pharmaceutical industries, and the food industry. 

On August 16, 2022, the US Government signed the Inflation Reduction Act. It intends to stimulate financial investments in the commercialization of cutting-edge technologies, including clean hydrogen and carbon capture and storage. It also allocates money directly to environmental justice priorities thus making companies see green energy as a strategic business sector.