A consortium of 15 Saudi Arabian investors is ready to take part in the Merauke Integrated Rice Estate (MIRE), injecting at least Rp600 billion ($65.04 million) into the region, an official says, The Jakarta Post reported.
The Agriculture Ministry's Secretary General, Hasanuddin Ibrahim, said each investor wanted to open about 5,000 to 10,000 hectares of land in Merauke, Papua.
"To open the land, investors need about Rp8 million to Rp10 million per hectare. So an investor needs to invest Rp40 billion for every 5,000 hectares of land they want to open," he said after the signing of a memorandum of understanding with the State Logistics Agency (Bulog).
Merauke Integrated Rice Estate is a program designed to make Merauke regency in Papua province an integrated rice production complex for supplying the staple food to eastern areas of the archipelago.
The government has provided 1.6 million hectares of land for the program.
The ministry earlier said investment would also be channeled for the construction of 700 km of roads in the regency, 1,500 km of connecting roads to West Papua, three ports and irrigation systems. The projects are expected to start by the end of this year.
In addition to investment in the agriculture sector, investors from Saudi Arabia are also interested in investing in Indonesia's tourism, food-processing and energy sectors.
Earlier, Agriculture Minister Anton Apriyantono said the country is set to place itself in the ranks of major rice suppliers of the world.
Apriyantono said to support the ambition, 1.6 million hectares of rice fields will be opened in Merauke, Papua involving a consortium of investors from Saudi Arabia. This project will cost around $15 billion.
He said he has discussed the plan with a delegation from the Saudi chamber of commerce and industry as a follow up to his meeting with the Saudi agriculture minister on the sidelines of the food summit in Rome last month.