Indonesia’s investment in green energy continues to gain strong momentum as investors target both renewable energy and resource-based industries. At the same time, natural resources investment still anchors the country’s broader economic strategy.
Government officials now emphasize a balanced approach that strengthens downstream processing while accelerating the energy transition. This dual focus positions Indonesia as a competitive destination for long-term capital in 2026 and beyond.
Natural Resources Still Lead Investment Interest
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM, Todotua Pasaribu, confirmed that sectors linked to Indonesia’s resource strength dominate investor attention.
“The most attractive sectors are certainly those related to the strength of our resources,” he said when speaking in Jakarta as reported by Metrotv News.
He explained that mineral industries such as oil and gas, along with agriculture, forestry, and maritime sectors, continue to attract capital because Indonesia holds large and diverse reserves. These sectors offer supply stability, which global markets increasingly value amid geopolitical and trade uncertainty.
Moreover, investors seek exposure to strategic commodities that support global manufacturing and industrial production. Nickel, copper, and other raw materials remain critical inputs. As a result, natural resources investment continues to form the backbone of industrial expansion.
Downstream Industrialization Drives Added Value
Beyond extraction, the government prioritizes downstream processing to increase domestic value-added. Officials encourage investors to process raw materials locally rather than export them in unrefined form. This strategy strengthens manufacturing capacity and supports job creation.
Todotua emphasized the direct link between industrial growth and logistics expansion.
“If there is growth in industrialization and manufacturing, then logistics will certainly grow as well,” he said.
Therefore, when industrialization accelerates, supply chain infrastructure expands alongside it. Manufacturing growth fuels demand for warehousing, transportation, and port services. Consequently, downstream industrialization in Indonesia strengthens multiple sectors at once without relying solely on commodity exports.
Indonesia Green Energy Investment Gains Strategic Importance
At the same time, Indonesia’s green energy investment plays a central role in the country’s long-term development strategy. Indonesia holds renewable energy potential of around 3,700 gigawatts, ranging from solar and hydropower to geothermal resources.
This vast capacity supports global Environmental, Social, and Governance (ESG) standards and net-zero emission targets. As international investors align portfolios with sustainability mandates, renewable energy projects in Indonesia attract growing interest.
However, Todotua cautioned that policymakers must maintain a competitive investment climate.
“Natural resources should not become more expensive to process domestically than abroad. This is a major homework for us,” he said.
His statement underscores a broader challenge. Indonesia must ensure efficient processing costs, regulatory certainty, and long-term policy consistency. Without these elements, investors may shift capital to competing markets.
Tariff Developments Add External Pressure
Meanwhile, trade dynamics with the United States add another layer of complexity. Indonesia and the U.S. recently signed a reciprocal tariff agreement that granted zero-percent import duties for 1,819 Indonesian product tariff lines. These products include palm oil, coffee, cocoa, spices, rubber, electronic components, semiconductors, and aircraft components. The agreement also included a quota-based zero-tariff arrangement for Indonesian textiles and garments.
However, the policy environment shifted quickly. The Supreme Court of the United States ruled that President Donald Trump lacked authority under the International Emergency Economic Powers Act to impose global tariffs. Following the decision, the U.S. implemented a temporary 10 percent global tariff, with plans to raise it to 15 percent.
This development introduces uncertainty for exporters and manufacturers. Nevertheless, Indonesian officials confirmed that further discussions with the U.S. will continue after the court ruling.
Balancing Stability and Sustainability
Overall, Indonesia now advances a two-track investment strategy. On one hand, natural resources investment ensures supply stability and industrial strength. On the other hand, Indonesia’s green energy investment supports decarbonization and long-term competitiveness.
By combining downstream industrialization with renewable energy expansion, Indonesia aims to strengthen domestic value-added while attracting global capital. If policymakers maintain cost efficiency and regulatory clarity, the country can secure a stronger position in the global investment landscape.
Source: metrotvnews.com, koran-jakarta.com
Image: Kitinut Tum / Canva
