September 6, 2018 Read More →

Indonesia puts hold on new power plant investment

Bloomberg:

Indonesia plans to delay $25 billion worth of power projects as it seeks to rein in a widening current-account deficit and a selloff in the nation’s currency.

The government will delay almost half of the planned 35 gigawatts of electricity projects as it wants to ease pressure on imports, Energy and Mineral Resources Minister Ignasius Jonan told reporters in Jakarta on Tuesday. The deferment may help reduce imports of about $8 billion to $10 billion, he said.

President Joko Widodo’s government is intensifying efforts to guard the rupiah, which is heading toward 15,000 to the dollar last seen during the Asian financial crisis two decades ago. Bank Indonesia has adopted a number of measures to improve liquidity and authorities said they will clamp down on speculation in the foreign-exchange market to curb volatility. The government is also planning to curb imports of some consumer goods to ease pressure on the current-account deficit.

“Power projects yet to achieve financing will be delayed as we want to reduce unnecessary imports,” Jonan said. The government also wants projects in the energy and mineral sectors to use local products as much as possible, he said.

More: Rupiah’s slump puts $25 billion Indonesian projects on hold

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