AmCham Update Vol. 4 #95

Tesla's Indonesia Factory on Backburner, ASEAN Entertainment Industry Potential, PLN Renewable Energy Capacity Target, OJK Revises Green Taxonomy Regulation

Sep 08, 2023

Tesla Unlikely to Build Indonesian Factory Any Time Soon: Luhut

Tesla is unlikely to build a factory in Indonesia in the near future, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said, after a meeting with Tesla CEO Elon Musk last month. He added that the global economic outlook and oversupply in the electric vehicle (EV) industry topped Musk’s concerns.

Tesla’s reluctance to invest in Indonesia did not rule out future possibilities for investment, as the company still viewed Indonesia as a priority, Luhut said.

However, Musk is still pressing forward on talks with the Indonesian government on providing satellite-based internet in remote areas through his SpaceX subsidiary Starlink, and is set to visit Indonesia in October this year.

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Indonesia’s Potential Across ASEAN Entertainment Industry

Consumption of Indonesian movies and digital products is expected to grow within the next 10-15 years, and will be increasingly watched by people around the world, according to Netflix Director of Public Policy Southeast Asia Ruben Hattari.

Investment trends for movies and digital products were discussed during a session at the ASEAN-Indo-Pacific Forum (AIPF) on Sept 6, bringing together a panel of representatives from Infinite Studios Nongsa Batam, Netflix, and Prime Video, and moderated by AmCham Indonesia Managing Director A Lin Neumann.

ASEAN saw revenue of $251.3 million in 2022 from the entertainment industry, and this predicted to grow by 11.52 percent by 2027. There is a trend for local content traveling across regions, with Indonesian content being viewed by audiences across the region, said Prime Video Head of Content Acquisition Chaitanya Divan. However, as piracy is still prominent, it is also important for content to be quickly localized, Chaitanya Divan warned.

Government involvement and collaboration are needed to ensure there is a more formulated structure for seeking funding and developing the industry, said Infinite Studios Nongsa Batam CEO Mike Wiluan. The success of other entertainment industries such as Korean dramas, Bollywood, and Japanese movies is proof that there is immense potential for Indonesia’s entertainment industry to grow.

AmCham Indonesia has actively supported the development of the creative economy in Indonesia. Providing right and compelling incentives, easing licensing process for inbound film production, upskilling human resources, and investing in infrastructure such as studios will all help to spur the growth of the local creative economy industry.

Watch the session at https://www.youtube.com/watch?v=dED68UsliwY

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AmCham Cares: YCAB Foundation

In a heartwarming display of unity and compassion, YCAB Foundation, Yayasan Pundi Amal Peduli Kasih (YPP), United Creative (UC), and RANS Entertainment have joined forces to extend a helping hand to the victims of the devastating earthquake which struck Cianjur, West Java, on Nov 21, 2022.

The earthquake, registering a magnitude of 5.6, left in its wake a tragic toll of 603 lives lost, over 7,000 injured, 114,683 displaced individuals, and a staggering 63,000 buildings razed, including 532 schools. The aftermath of this calamity has cast a long shadow over the welfare and education of local children, who now face a daunting challenge to continue their studies.

Amid this challenging scenario, the combined efforts of YPP, United Creative, RANS Entertainment, and YCAB culminated in an impressive fundraising total of Rp 279,266,472. This sum will be further augmented by a generous YCAB donation, bringing the total funds raised to Rp 545,414,832. This commendable feat has paved the way for a vital initiative aimed at alleviating the hardships endured by the affected communities.

The funds procured through this collaborative initiative will be channeled into impactful avenues of assistance. A pivotal aspect involves providing much-needed furniture to the affected schools, fostering an environment conducive to learning and growth. This concerted effort is crucial to enable students to embark on a fresh academic term with resilience and optimism.

As part of the response strategy, an in-depth assessment of the affected areas is underway, which will identify the schools most gravely affected by the earthquake’s aftermath. While the government has committed to rebuilding the damaged schools, the provision of essential educational furniture and equipment remains a challenge yet to be addressed.

The forthcoming assistance will encompass a range of provisions to fortify the affected schools, including chairs, tables, whiteboards, stationery, laptops for teachers, and educational resources. A specialized training program in science, technology, engineering, and mathematics (STEM) subjects is also in the offing. This innovative program aims not only to motivate students to reengage with their studies but also to equip them with skills which are increasingly vital in today’s rapidly evolving world.

Integral to this initiative is the overarching goal of providing equal opportunities, particularly through STEM education. The program aspires to cultivate a paradigm shift in young minds, sparking curiosity, analytical thinking, and a passion for STEM subjects and careers. The educational module will be delivered through offline training, with an engaging web-based educational game as the platform.

PLN Targets Increasing Renewable Energy Capacity to 32 Gigawatts

State electricity company PLN is increasing its renewable energy capacity target to 32 gigawatts by investing in grids connecting more renewable power sources, said PLN President Director Darmawan Prasodjo.

Under PLN's 2021-2030 roadmap, it aims to expand renewable-sourced power capacity by 20.9 gigawatts, or 51 percent of total new additional power generation capacity for the period. With the accelerated renewable energy capacity, 75 percent of Indonesia’s additional power generation capacity will be renewable-based, and 25 percent will be gas-based, said Darmawan on the sidelines of the ASEAN Indo-Pacific Forum.

The government hopes the capital promised through the Just Energy Transition (JETP) will support PLN’s planned grid installation, said Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan at a separate event. JETP was briefly discussed by President Joko Widodo and US Vice President Kamala Harris on Sept 6 at the ASEAN regional bloc meeting.

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OJK Revises Green Taxonomy Regulation

The Financial Services Authority (OJK) is revising Indonesia’s Green Taxonomy, an economic activity classification which supports environmental protection and climate change mitigation efforts. With this revision, “retiring” coal-fired power plants, or those plants in the energy transition process, will be classified as eligible to receive sustainable funding.

The revision is influenced by recent developments in the region such as the revised ASEAN Taxonomy for Sustainable Finance, which gives green labels to retiring coal-fired power plants for sustainable funding. Even though retiring coal-fired plants does not always result in the construction of a new renewable power plant, the ASEAN Taxonomy still considers them green. What matters is the end result of reducing emissions in the supply chain, said OJK Board of Commissioners Chief Mahendra Siregar.

OJK is also evaluating whether coal-fired power plants which produce energy used in the production of green-based industries, such as EV batteries, will be classified as green.

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Malaysia, Brunei to Invest in Nusantara

The Nusantara National Capital (IKN) Authority has successfully secured 19 letters of intent from Malaysian companies to invest in the new capital city Nusantara project, IKN Authority Deputy of Financing and Investment Agung Wicaksono said during a roundtable discussion at the ASEAN Business Advisory Council (ASEAN-BAC) on Sept 5. Investors from Brunei Darussalam, who were also in attendance, have shown their interest as well, given their prominent role in the global halal industry.

The authority has so far secured around 270 letters of intent, which come mostly from neighboring countries. Based on discussions at ASEAN-BAC, the capital city will be developed as a tri-country connectivity city involving Indonesia, Brunei Darussalam, and Malaysia, Wicaksono said.

The government has provided incentives to develop 12 fundamental sectors in Nusantara, including communication facilities, transportation, sanitation, housing, and healthcare and education facilities.

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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard.

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