Indonesia-Singapore to Develop Green Industrial Zone in Riau Islands, Use Clean Electricity

17 Jun 2025

Business News
Energy Transition
International Cooperation
Investment

The governments of Indonesia and Singapore will develop an integrated green industrial zone in the Riau Islands. This development is part of a strategic cooperation agreed upon by both countries through a memorandum of understanding on a sustainable industrial zone. 

 

Minister of Energy and Mineral Resources Bahlil Lahadalia stated that this project aligns with President Prabowo Subianto's directive to establish mutually beneficial cooperation in the clean energy sub-sector. 

 

"We have asked the Singaporean government to seriously consider the development of an industrial zone aimed at downstream processing based on renewable energy," said Bahlil in a press release, quoted Tuesday, June 17. 

 

The development of this industrial zone is designed with a comprehensive ecosystem. The energy supply will come from cross-border electricity trade based on clean energy. 

 

In addition, to keep emissions low, carbon capture and storage (CCS) technology will be implemented through a separate memorandum of understanding in that area. 

 

According to Bahlil, this agreement opens up new market opportunities for national solar and geothermal energy. CCS technology will provide a solution for industries that face difficulties in decarbonization. 

 

For the government, the development of a green industrial zone in Riau Islands is expected to become a model for low-carbon economic development, capable of creating thousands of new jobs and encouraging the transfer of advanced technology. 

 

Bahlil emphasized that downstream processing is a non-negotiable requirement in this cooperation. He confirmed that industries for producing key components such as solar panels and cables will be established in Indonesia as part of the agreement. 

 

"The added value we will build is in solar panels. The industry will be here in Indonesia. Even the cables will also be manufactured here," Bahlil said. 

 

He is optimistic the project will proceed smoothly as it has been thoroughly prepared. The industrial zone will be built in Karimun and Bintan, areas close to Singapore. 

 

“The total investment outside of that alone is already around USD 10 billion (approximately IDR 163 trillion), and most importantly, potential investors are already lined up,” said Bahlil. 

 

The memorandum of understanding (MoU) was signed by Bahlil and Singapore’s Minister for Energy and Science & Technology, Tan See Leng, and witnessed directly by President Prabowo and Singaporean Prime Minister Lawrence Wong in Singapore on Monday, June 16, local time. 

 

For context, Bahlil and Tan See Leng had previously signed three MoUs on environmentally friendly energy development between the two countries, which took place last Friday at the Ministry of Energy and Mineral Resources office in Jakarta. 

 

This energy cooperation is outlined in three MoUs: the sustainable industrial zone (SIZ); cross-border electricity interconnection and trade, renewable and low-carbon energy technologies, and energy efficiency and conservation; and cross-border carbon capture and storage collaboration. 

 

This article is published in partnership with Katadata 

Original article here