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U.S. Unveils Investments in Indonesia Led by $698 Million Climate-Conscious Compact

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U.S. Unveils Investments in Indonesia Led by $698 Million Climate-Conscious Compact

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  • The Millennium Challenge Corporation Compact will support development of climate-conscious transportation infrastructure
  • Compact will also increase access to finance for women-owned businesses
  • Other initiatives to focus on sustainable fishing, food security and plastic pollution

The United States and Indonesia share a deep and enduring Strategic Partnership, anchored in shared values of democracy and pluralism, and our common commitment to the rules-based international order. The United States remains focused on supporting Indonesia’s security and prosperity, while working together to tackle the climate crisis, promote access to affordable food and energy, strengthen pandemic preparedness and the global health architecture, expand our important people-to-people ties, and address the crises in Burma and Afghanistan. In Fiscal Year 2022 alone, the U.S. Department of State and U.S. Agency for International Development are planning to provide Indonesia with more than $150 million in bilateral development and security assistance.
 
On the margins of the G20 Summit in Bali, Indonesia, President Biden and President Widodo will hold a bilateral meeting, during which the leaders will review efforts to accelerate U.S.-Indonesian partnership across a wide range of shared challenges and opportunities, including through the Indo-Pacific Economic Framework (IPEF) and the Partnership for Global Infrastructure and Investment (PGII). During the G20 Summit, the United States and Indonesia will join with partners to unveil transformative new PGII initiatives that will accelerate Indonesia’s clean energy transition and promote enduring prosperity. And today, President Biden is announcing the following new initiatives:
 
Millennium Challenge Corporation (MCC) Compact: The United States and Indonesia have successfully concluded negotiations to launch a $698 million MCC Compact, supported with $649 million from the United States and $49 million from Indonesia. The Compact will support the development of high-quality, climate-conscious transportation infrastructure in five provinces; mobilize international capital in support of Indonesia’s development goals, in part by building the capacity of Indonesia’s financial markets; and increase access to finance for Indonesia’s women-owned businesses and micro, small, and medium sized enterprises.
 
Sustainable Fishing and Marine Biodiversity: In partnership with Indonesia’s Ministry of Marine and Fisheries Affairs, USAID is launching two new programs that will protect Indonesia’s marine biodiversity and critical mangrove ecosystems by enhancing the sustainable and equitable management of fisheries and Marine Protected Areas, and building the resilience of commercial supply chains and fisheries-dependent communities to the impacts of climate change.
 
Carbon Capture:  ExxonMobil and Indonesian state-owned energy company Pertamina have signed a $2.5 billion agreement to further assess the development of regional Carbon Capture and Sequestration Hub in Indonesia. This partnership will enable key industry sectors to decarbonize, including the refining, chemicals, cement, and steel sectors, thereby lowering carbon emissions while creating economic opportunities for Indonesian workers, and this agreement will help Indonesia achieve its net-zero ambitions in 2060 or sooner.

See related article: U.S. Climate Envoy Kerry Launches Carbon Offset Plan
 
Coast Guard Capacity-Building: Building on longstanding cooperation between the United States and the Indonesian Maritime Security Agency (BAKAMLA), the United States will now support BAKAMLA’s maritime surveillance drone program. U.S. support will enable BAKAMLA to procure drones, pilot training, and maintenance that will significantly enhance BAKAMLA’s capabilities related to maritime domain awareness, maritime law enforcement, and countering illegal fishing.  

Image: President Joe Biden meets with Indonesia President Joko Widodo, November 14, 2022. Source: Twitter @jokowi

Investing in Food Security & Critical Supply Chains: The U.S. International Development Finance Corporation will invest $20 million in Indonesia’s Aruna Global Technologies to connect Indonesia’s small-scale rural fishers to the global market through innovative technology platforms that empower women and marginalized communities, drive down food costs, and increase resilience in food supply chains in the second-largest fishing industry in the world.
 
Reducing Plastic Pollution: USAID will launch a new initiative to support public-private cooperation to reduce land-based sources of ocean plastics pollution, in line with circular economy principles. USAID will partner with local governments, the private sector, and community groups to promote integrated waste management, thus improving waste collection and treatment and strengthening the value chain for recycling. 
 
Greening Public Transit: The U.S. Trade and Development Agency is launching a new partnership with MRT Jakarta, which manages the capital’s public rail system, to support the public transit system’s transition to renewable energy sources.
 
Investing in Cutting-Edge Energy Technology: The U.S. International Development Finance Corporation will support HDF Energy’s investment in a portfolio of green hydrogen projects in Indonesia called “Renewstable,” which combines renewable energy with battery and green hydrogen backed storage to deliver stable and reliable power to electricity grids.
 
Preserving Biodiversity: USAID plans to launch a new partnership with Indonesia’s Ministry of Environment and Forestry on the conservation of orangutans and other vulnerable species such as elephants, tigers, and rhinoceroses in Sumatra and Kalimantan. This partnership will improve conservation data collection; facilitate collaboration among local government, the private sector, and communities; and reduce human-wildlife conflict.
 
Supporting Ports and Fisheries in the Pacific: The United States and Indonesia committed to partnering to enhance port and fisheries administration in the Pacific. By leveraging Indonesian expertise in port and fisheries administration and logistics, and in concert with Pacific partners, the United States and Indonesia will send technical experts to the region to support critical Pacific port and fishing needs.
 
Education Cooperation:  Building on the bilateral Educational Cooperation MOU signed by the United States and Indonesia in December 2021, the United States has now allocated resources for a 30% increase in educational advising centers in Indonesia, which will provide new opportunities for Indonesian students to study in the United States.  In addition, Peace Corps volunteers and Fulbright scholars and teachers will return to Indonesia in January of 2023, after a multiyear hiatus caused by the COVID-19 pandemic.  
 
Piloting Innovative Medical Technologies:  The U.S. Trade and Development Agency and GE Healthcare announced plans to co-fund a pilot project to support the Indonesian Ministry of Health (MoH) develop a national image and data repository (NIDR), creating a new cloud-based centralized warehouse for electronic medical records and a hub-and-spoke network connecting general practitioners in primary care facilities with cardiologists in a central hospital.
 
Supporting Sustainable Development in Indonesia’s New Capital: USAID is partnering with the Ibu Kota Nusantara Authority – founded by President Widodo to oversee the relocation of the Indonesian capital – to provide project management support and technical assistance on the new capital’s development, with a focus on smart city and “Forest City” principles.

Source: White House

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