West Sulawesi could attract up to $1 billion in foreign direct investment this year, Investment Coordinating Board chairman Gita Wirjawan said during a visit to the province on Thursday.
Gita said West Sulawesi’s agricultural and fisheries resources, as well as its oil reserves and potential as a source of hydroelectricity, made it attractive to foreign investors.
The board, known as the BKPM, is working to make several other provinces more attractive to foreign investors, including Riau, West Kalimantan, and Papua. Along with West Sulawesi, those three provinces could also attract up to $1 billion in foreign investment this year, Gita said. Foreign investors had been well-informed of the potential of these areas, he said.
However, PT Bank Internasional Indonesia chief economist Juniman said the BKPM would struggle to lure investors to West Sulawesi because of its poor infrastructure, including the provincial government’s failure to provide a reliable electricity supply.
“To market areas like West Sulawesi, the government and the BKPM will have to put in extra effort, as infrastructure is still mediocre there,” Juniman said.
Earlier this week, Gita said BKPM was targeting a total of $5 billion in foreign direct investment nationwide this year.
Juniman said the BKPM should be aiming for $6 billion to $7 billion.
“Even though West Sulawesi is still a relative unknown to foreign investors, and infrastructure and energy is still mediocre, Indonesia possesses many other areas that will be able to attract huge foreign investment,” he said.
West Sulawesi Governor Anwar Adnan Saleh said the region had tremendous potential but acknowledged that it required more infrastructure development to attract foreign investors.
“West Sulawesi still requires more investment in the building of ports, [and infrastructure to support] agriculture, energy and tourism,” he said. “We’ve prepared support for investors wishing to invest in those areas, such as electricity and hotels, to accommodate their needs.”
The province had a long-term plan to attract an international investor to build a 1,800 megawatt hydropower plant in the province, he said.
Harry Warganegara, the director of the West Sulawesi provincial enterprises department, said the provincial government was building several smaller hydropower plants of 5MW to 10MW that would cost Rp 5 billion to Rp 10 billion each. They should be finished in a year, he said.