Economists Optimistic Indonesia-Japan Energy Cooperation Will Have Positive Impact
ECONOMIST Hendry Cahyono from Surabaya State University has praised the energy diplomacy of Energy and Mineral Resources Minister (ESDM) Bahlil Lahadalia regarding Indonesia-Japan cooperation in the energy and critical minerals sectors. He views this as a strategic step in promoting green energy transition whilst strengthening national energy security.
The collaboration encompasses nuclear energy development, LNG exports, and Waste-to-Energy Power Plants (PLTSa). Hendry considers this agreement a positive signal that Indonesia is becoming increasingly serious about developing clean energy based on advanced technology.
“From a technical and economic perspective, Indonesia has actually been planning to develop nuclear power plants since the 1960s. This MoU demonstrates a step forward, although the path to realisation remains long,” Hendry stated when contacted by journalists on Tuesday (17 March 2026).
The cooperation is outlined in a Memorandum of Cooperation (MoC) signed by ESDM Minister Bahlil Lahadalia together with Japan’s Minister of Economy, Trade, and Industry Ryosei Akazawa.
According to him, cooperation with Japan provides significant opportunities for Indonesia to accelerate the mastery of new energy technologies, including nuclear power, which has previously been constrained by investment costs and technology transfer. Hendry emphasised that the potential benefits of this cooperation are substantial when linked to Indonesia’s abundant mineral resources, particularly in supporting a clean energy ecosystem.
“Indonesia possesses approximately 43 per cent of the world’s nickel reserves, as well as reserves of bauxite, tin, copper, and rare earth metals. This represents a strong foundation for downstream processing and the development of green energy industries,” he said.
He added that this cooperation extends beyond energy supply and has the potential to create layered economic impacts for Indonesia, ranging from improved production efficiency to job creation.
“It is hoped there will be a multiplier effect on national production efficiency, increased revenue, and labour absorption,” Hendry stated.
Furthermore, Hendry noted that amid an uncertain global geopolitical situation, Indonesia’s move to strengthen energy cooperation is viewed as a correct and visionary decision.
“This step represents a rational response to geopolitical disruption. Indonesia’s current position is actually at a very favourable window of opportunity,” he said.
Nevertheless, Hendry cautioned the importance of ensuring that cooperation implementation runs optimally, particularly in the technology transfer aspect so that Indonesia does not simply become a market. Although Indonesia is relatively behind developed nations in nuclear energy development, Hendry noted that this condition actually presents a distinct advantage.
“Indonesia can learn from the experience of other countries, including from the Fukushima case, so it can directly adopt safer technology without repeating past mistakes,” he concluded.
Previously, the signing of this energy MoU was carried out by Bahlil and Akazawa during a bilateral meeting held during the Indo Pacific Energy Security Ministerial and Business Forum in Tokyo, Japan, on Sunday (15 March 2026).
Cooperation in the nuclear energy sector is focused on technology development whilst prioritising high safety standards. Through this cooperation, Indonesia has the opportunity to leverage Japan’s experience and technology to develop low-carbon energy.