Jakarta. Indonesia has clinched $10.2 billion worth of business deals with South Korea as President Prabowo Subianto made his first-ever state visit to a country that he described as a “very close friend."

The energy-heavy memoranda of understanding (MoUs) became the highlight of a joint business forum held in Seoul on Wednesday local time. Some of these deals are expected to put the coal-reliant Indonesia on track for a shift to emission-free energy sources.

“They revolve around solar power, carbon capture and storage [CCS], as well as renewable energy. There are those related to industries and manufacturing of steel, batteries, and environmentally friendly vehicles,” senior minister Airlangga Hartarto said.

The state-run energy firm Pertamina is set to bring home 3 CCS deals, one signed with the steelmaker POSCO. Bumi Serpong Damai (BSD City), the township project located in Tangerang, is about to gain South Korean backing. Business lobbies Kadin and KCCI shook hands on a deal. KCC Glass, which runs a giant glass factory in Central Java’s Batang, was also among the signatories.

Indonesia had engaged in further talks with Lotte Chemical and POSCO, according to Investment Minister Rosan Roeslani. Lotte Chemical already owns a $3.9 billion integrated petrochemical complex in Cilegon. POSCO has a joint venture with Indonesia’s state-owned Krakatau Steel. 

From the discussions with local businesses, Rosan — who helms the sovereign fund Danantara — revealed that South Korean investors did “not mind calculated risks” when doing business with Indonesia. Their biggest concern lies in the “uncertainty” related to the bureaucratic red tape. 

“We are working to minimize the uncertainty. … We will improve our policies,” Rosan said.

The following is the list of the business deals signed in Seoul as revealed by the Indonesian Chamber of Commerce and Industry (Kadin). 

• (MoU) Kadin and KCCI 

• (MoU) Danantara and KIND, the government-run body formed to help Korean companies secure overseas infrastructure projects

• (MoU) Danantara and Korea Eximbank

• (MoU) PLN IP and LXI on a joint study on renewable energy development

• (MoU) Pertamina Hulu Energi and POSCO on a second amendment to a joint study on renewables

• (Announcement) Metals giant LS MnM’s majority acquisition of Teluk Metal Industry for the battery material value chain 

• (MoU) Sinarmas Land and Daewoo on BSD City development

• Pertamina Hulu Energi and ExxonMobil on cross-border CCS

• (MoU) Crypto operators Fortuna Integritas Mandiri and Dunamu on strengthening Indonesia’s digital asset ecosystem

• Kadin Jakarta and KCCI Incheon

• Ecopro’s letter of intent on investment related to secondary battery materials

• (Announcement) Sambu on bag-making facility

• (Announcement) Dorco on razor manufacturing plant

• (Announcement) E3 Mobility on environmentally friendly transportation

• POSCO’s letter of intent on Krakatau POSCO’s phase-two expansion

• (MoU) Pertamina and POSCO on low-carbon technology

• KCC Glass’ letter of intent on copper cathode procurement

The chamber of commerce did not disclose the individual value of the deals.

Earlier in the day, Prabowo held bilateral talks with South Korean President Lee Jae Myung. They agreed to elevate bilateral ties to the highest level, namely the so-called “special comprehensive strategic partnership”. 

South Korea was Indonesia’s seventh-largest investor last year, spending nearly $2 billion. A bilateral free trade agreement — aimed at gradually eliminating virtually all tariffs — has been in place for three years now. Indonesia’s surplus with South Korea had almost doubled from $1.4 billion in 2024 to around $2.2 billion the following year.