Indonesia and Singapore have signed a memorandum of agreement to develop a Supply Chain of solar production in the province of Riau Islands in Indonesia, as part of broader plans to make cross-border clean energy trade possible.
Indonesia And Singapore have agreed to build a solar panel industry on the Riau Islands.
The agreement includes plans to develop an integrated green industrial zone in the Indonesian province to support cross -border clean energy trade between the two countries. The zone will be in the regency of Karimun and on the island of Bintan, both near Singapore.
According to a press release from the Indonesia’s Ministry of Energy and Mineral Resources, Carbon Capture and Storage (CCS) technology will also be used in the zone, supported by a separate agreement.
The Indonesian Energie Bahlil Lahadalia minister confirmed that the production of solar panels and cables will be part of the agreement. He said this would create new opportunities for the solar energy market. He also said that CCS technology would offer solutions for industries that are difficult to decorate.
“The total investment in this project alone is about $ 10 billion, and the most important thing is that potential investors have already been identified,” Bahlil added.
A separate press release from the ministry said that the $ 10 billion capital scheme, supported by both governments, will be implemented in three phases. The first will cover the construction of solar panels, followed by a second focused on carbon-catch and storage facilities, and a third party that will “produce production, technology and logistics supply chains with low carbon emission rights”.
The integrated green industrial zone is expected to create tens of thousands of jobs, starting with the production and maintenance of the solar panel and storage of battery energy. It is also expected to generate up to $ 6 billion in extra annual currency exchange. The agreement follows three other Clean Energy Collaboration Deals between the two countries in recent weeks.
The cumulative solar capacity of Indonesia surpassed 700 MW in August 2024, according to the Institute for Essential Services Reform.
The total solar capacity of Singapore reached 1,157 MW at the end of 2024, an increase of 919 MW the year before, according to the International Renewable Energy Agency (Irena). In November 2024, research by the National University of Singapore indicated that by 2028 the country could reach its 2 GW target of solar installation, prior to the 2030 deadline.
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