According to a Reuters report citing sources familiar with the matter and an official economic ministry presentation seen by the media outlet, Indonesia’s sovereign wealth fund Danantara is preparing to sign an $8 billion engineering, procurement, and construction agreement with KBR Inc. from the U.S. to build 17 modular oil refineries.
The deal, which has not been previously reported, forms a key part of a recent trade pact between Indonesia and the United States that resulted in the threatened U.S. tariff rate dropping to 19% from 32%.
The project was introduced during a private session with Indonesian business leaders on Monday evening by Economic Minister Airlangga Hartarto, who served as chief negotiator for the trade agreement.
Previously, earlier reports shed light on the U.S.-Indonesia trade agreement regarding plans for Indonesia’s greater imports of American energy, agricultural products, and commercial aircraft.
The presentation also mentioned a potential $2 billion investment by Indonesian conglomerate Indorama into blue ammonia production in Louisiana. However, it noted that the project’s viability hinges on securing U.S. tax credits.
Last week, President Donald Trump announced that Indonesia will acquire 50 Boeing aircraft as part of the broader deal, with the total value of aviation agreements reaching $14.4 billion.
Envisioned as a counterpart to Singapore’s Temasek, Danantara is expected to oversee more than $900 billion in assets, making this one of the world’s largest sovereign funds. Danantara is the largest sovereign fund in the country and Indonesia’s second sovereign wealth fund after the Indonesia Investment Authority and will operate separately.
Overall, possible transactions between the two countries could rise to $34 billion, reflecting Indonesia’s strategy to secure a landmark agreement with Washington and power its $1.5 trillion economy toward an 8% growth target.
