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Green Finance / Asset Management
Indonesia sovereign fund, China firms target EVs
Possible US$2 billion green fund to leverage nickel reserves, promote sustainability
Tom King 16 Nov 2022

Indonesia's sovereign wealth fund, the Indonesia Investment Authority (INA), has signed a memorandum of understanding with Chinese partners to explore electric vehicle (EV) supply-chain investment in Southeast Asia’s largest economy.

The INA, together with Contemporary Amperex Technology (CATL) and CMB International Capital (CMBI), aim to jointly invest in the establishment of a green fund that will focus on end-to-end EV value-chain investment, primarily in Indonesia, and support Indonesia’s sustainability and commitment to carbon neutrality by 2060.

The fund, whose value the INA believes could reach US$2 billion, will serve as a platform to acquire investment opportunities in the emerging EV ecosystem.

By leveraging Indonesia’s core advantages as a key producer of green raw materials, the growing domestic vehicle market, as well as each party’s strengths, networks and resources, the parties believe the fund will have the capacity to deliver long-term sustainable returns to its investors.

The global EV market has shown exponential growth over the past decade. And, driven by increasing environmental awareness and improvements in technology, this momentum is expected to continue, with the global EV market estimated to offer a US$1 trillion opportunity across its entire value chain.

Indonesia, with its significant nickel reserves, is strategically positioned to become a meaningful player in the global EV supply chain as the metal is a key material in the production of EV batteries. And the country is expected to emerge as a global nickel hub, with approximately 50% of the world’s refined nickel being supplied by the country by 2030.

The INA’s CEO, Ridha Wirakusumah, says: “The strategic partnership with CATL, a global leader in new energy technology innovation, and CMBI, a highly regarded financial institution with proven investment experience in the EV value chain, align with our mission to create long-term prosperity for future generations through sustainable investments.”

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