The Indonesia Investment Authority (INA), the country’s sovereign wealth fund, will set up a green electric vehicle (EV) fund worth USD2bn with Chinese battery giant Contemporary Amperex Technology (CATL) [300750:CH] and CMB International, an investment arm of China Merchants Bank (CMB) [3968:HK], as reported by Reuters on November 14. The three parties reached an agreement during a business conference on the sidelines of the G20 summit. According to INA CEO, Ridha Wirakusumah, the fund will invest in the EV value chain to capture a fast-growing market prompted by countries’ pledge to reduce greenhouse gas (GHG) emissions.
The fund represents CATL’s further expansion in Indonesia’s EV industry. In April. the Chinese company also inked a tri-party agreement with Indonesia’s PT Aneka Tambang (ANTAM) [ANTM:IJ] and PT Industri Baterai Indonesia (IBI) to collaborate on the Indonesia EV Battery Integration Project. With a total investment of USD6bn, the project covers nickel mining and processing, battery material, as well as battery manufacturing and recycling. CATL vowed to help Indonesia make everything green along the country’s planned battery supply chain. Specifically, the firm plans to deploy massive renewable sources and build an energy storage system to support energy-intensive smelting activities. Indonesia also seeks to tap its abundant nickel reserves, which account for 22% of the world’s total, to attract foreign investors and prosper the domestic EV sector. Ridha expects Indonesia to have 2.1m electric motorcycles and 400,000 electric cars on the road by 2025, from 22,942 electric motorcycles and 4,904 electric cars by October 2022.