Indonesia to Break Ground on US$6 Billion Downstreaming Projects

President Prabowo Announces Major Industrial Push

Indonesian President Prabowo Subianto has announced that Indonesia will break ground on US$6 billion worth of downstreaming projects within weeks. The announcement was made on Monday, January 12, 2026, during the launch of the Refinery Development Master Plan (RDMP) project at Refinery Unit V in Balikpapan, East Kalimantan. These projects are a cornerstone of Indonesia's national strategy to accelerate industrialization and enhance the value derived from its abundant natural resources.

President Prabowo stated, 'Within weeks, we will start these projects. We expect at least six projects initially, with the potential to expand to 11, with a total value of approximately US$6 billion.' He emphasized that these efforts are crucial for strengthening the national industry amidst escalating global competition.

Strategic Objectives and Management

The downstreaming policy is designed to reduce Indonesia's reliance on raw material exports, instead focusing on processing these commodities domestically to create higher value-added products. This approach aims to bolster domestic industrial competitiveness and attract significant foreign investment.

The projects are managed by Danantara, Indonesia's investment and sovereign wealth manager. The government plans to prioritize readiness in human resources and project management to effectively accommodate the anticipated large-scale foreign investments.

Scope of Downstreaming Initiatives

Indonesia's broader downstreaming roadmap encompasses 28 strategic commodities across various sectors, including mining, agriculture, and energy, with a projected investment value of US$550 billion by 2040. The success of nickel downstreaming, which saw exports surge from US$3.3 billion to US$35 billion, serves as a key example of the policy's potential.

Key sectors targeted for downstreaming include:

• Minerals: Nickel, bauxite (for aluminum), copper, tin, and rare earth minerals.
• Oil and Gas: Refining, petrochemicals, and LNG processing.
• Agriculture: Palm oil (for biodiesel, oleochemicals), rubber, coconut, and seaweed.

Specific projects mentioned in the broader downstreaming agenda include an aluminum smelter in Mempawah, West Kalimantan; a stainless steel slab plant in Morowali, Central Sulawesi; a copper rod, wire, and tube plant in Gresik, East Java; and Dimethyl Ether (DME) plants in various locations. Additionally, plans include an oil storage facility on Nipah Island and an oil refinery with a capacity of 500,000 barrels per day.

Long-Term Vision for Industrialization

President Prabowo expressed optimism that professional and responsible management will enable Indonesia to achieve its downstreaming goals, acknowledging that while the process requires substantial funds, it is vital for the nation's economic future. The overall downstreaming program is expected to attract US$618 billion in investments over the next 15 years, contributing significantly to economic growth until 2040.