Ambassador Donovan’s Remarks on U.S.-Indonesia Energy Day

U.S. Ambassador Joseph R. Donovan’s Remarks on U.S.-Indonesia Energy Day (State Dept. / Budi Sudarmo)

Selamat pagi. Good morning. Welcome. Selamat datang di U.S.-Indonesia Energy Day pertama. Minister Jonan, Director Syofvi, it’s a great pleasure to welcome all of you to this event, co-hosted by the Ministry of Energy and Natural Resources and the U.S. Power Working Group for Indonesia. Thank you to Minister Jonan and his team for allowing us to gather here at the Ministry.

Let me start right off by saying that this is not intended to be your typical energy conference. Today’s event is about celebrating partnerships and inspiring new ones — partnerships that bring together the best of American and Indonesian innovation and technology to deliver cost-effective, reliable, and sustainable energy to Indonesia.

We will start the morning by listening to Minister Jonan describe the energy landscape in Indonesia. Then we will give our companies a chance to engage the Minister about trade and investment opportunities. Following that, we will celebrate a number of recent commercial deals, government-to-government programs, and new initiatives that we hope will bring reform and — subsequently — investment to Indonesia’s energy sector.

Then, we’ll hear from a number of panels on highly efficient, low-emission fossil fuels; renewables; transmission, distribution, and smart grids; and rural electrification. You’ll see we have some of the world’s leading experts from the National Renewable Energy Laboratory, the Department of Energy, and U.S. and Indonesian industry here with us today.

U.S.-Indonesia Energy Day is built around one of our most innovative partnerships, the U.S. Power Working Group for Indonesia, a collection of 55 U.S. companies and eight U.S. government agencies all focused on contributing to Indonesia’s energy development. Our two governments signed the MOU launching the Power Working Group in September 2015. Since then, we’ve celebrated nearly Rp 80 trillion ($6 billion) in deal signings in addition to facilitating dialogue between U.S. industry and Indonesian policymakers on topics such as waste-to-energy and microgrids.

We all know that to grow an economy, you need secure, sustainable, and affordable energy. And to get that, you need industry and government working together to create an enabling environment for investment and growth. Despite the power sector being one of the most-regulated markets in any economy, technology and innovation play a critical role.

Technology and innovation is where U.S. companies excel. Just in the room today, we have world leaders in power transmission; microgrids and smart grids; utility-scale batteries; geothermal drilling; turbines; clean energy finance; and engineering, procurement, construction, and maintenance of power plants. At the Embassy and at our two consulates in Medan and Surabaya we are focused on sharing this expertise with Indonesia. You’ll hear later today about how the U.S. Trade and Development Agency is organizing a trade mission from Indonesia, Vietnam, Thailand, and India to the United States to learn about coal emissions monitoring and control technology. You’ll also hear about USAID’s exchange program linking California utilities with PLN and the Millennium Challenge Corporation’s work to develop new models of community engagement, ownership, and management of renewable energy. The U.S. Mission to Indonesia works best, in my opinion, when we enable links between our two dynamic populations to solve today’s most-pressing challenges. U.S.-Indonesia Energy Day is designed to do just that.

In that spirit, and knowing that Minister Jonan is never one to shy away from tough conversations, let me lay the groundwork for your discussion with the Minister and the subsequent panels by suggesting several concrete ways the Indonesian government can increase foreign investment and trade in the energy sector.

First, I hope the Indonesian government continues its regulatory reform efforts. President Jokowi has rightly highlighted this issue as essential for promoting healthy competition and job creation. I believe good regulatory practices, such as meaningful and transparent consultations with stakeholders, public comment periods for draft regulations, and adherence to Indonesia’s international commitments, are essential for increasing market confidence and certainty.

Second, structural barriers in the economy, such as local content requirements and regulations that cap both the ownership percentage and investment return for foreigners, contribute to a significant and persistent trade imbalance between our two countries, as well as limit potential trade and investment benefits to Indonesia. Eliminating local content requirements across all sectors would allow Indonesia to benefit from global expertise and technology and better integrate into global supply chains, and has the potential to spur further investment.

I hope you’ll discuss these potential reforms, and others, during today’s event.

To close, let me reiterate the U.S. commitment to helping Indonesia meet its energy goals. If this event wasn’t proof enough, I’m happy to announce that on Monday, we will welcome to Jakarta the Chairman of the Committee on Energy and Commerce in our House of Representatives, along with seven of his colleagues from Congress. The Congressional delegation is here to learn more about Indonesia’s role in global energy markets and how Congress can help promote our energy cooperation. They look forward to meeting Minister Jonan to reinforce the themes we discuss today.

Thank you and, again, welcome. I look forward to seeing all of you tonight at my residence to continue today’s important discussions, all related to the theme of secure, sustainable, and affordable energy for Indonesia.