Investment on Bali: 10th in Foreign Direct Investment Ranking
Bali, the most popular tourist destination in Indonesia (and therefore an important destination for foreign direct investment, or FDI), is optimistic that it will achieve its full-year 2017 investment target. Ida Bagus Made Parwata, Head of Bali's Investment Board (BPMP), said the island targets to see IDR 12.4 trillion (approx. USD $918 million) worth of investment in 2017.
It is interesting to note that domestic direct investment (DDI) is not too significant in Bali. In the first half of 2017, domestic investors only invested a total of IDR 133.9 billion (approx. USD 9.9 million) in a total of 58 projects on the island. Hence, Bali only ranks 31st on the list of regional investment destinations.
However, in terms of foreign direct investment (FDI) Bali ranks 10th, attracting USD $602.9 million in 964 investment projects with particularly many investors originating from Asia (Singapore, Japan, China and Hong Kong).
Ida Bagus Made Parwata added that there is a significant amount of interest for investment in Bali from China. However, contrary to investors from Europe, Chinese investors tend to require a lot of time to prepare their investment plans and pose many detailed questions about a whole range of matters. Therefore, actual investment realization from China on Bali is actually still limited despite massive interest.
One of the projects that is desired by Chinese investors is the 204-kilometer Canggu-Singaraja toll road that will ultimately connect South Bali to North Bali. It is estimated that this project requires IDR 3 trillion (approx. USD $222 million) in investment.
Various parties showed their interest in this Canggu-Singaraja toll road project. However, only one investor seems serious. Without mentioning any names, it involves a consortium owned by Chinese investors who are currently living in London, United Kingdom. This consortium wants to finance the full 100 percent of the project. However, based on local laws, a foreign investor can only finance 67 percent of the toll road project.
"One of the reasons why this consortium is interested in the Canggu-Singaraja toll road is because if it would bring its money into China, then these funds cannot exit China again", Ida Bagus Made Parwata said. The Bali Investment Board Head therefore hopes to see a partnership between the Chinese consortium (67 percent) and Indonesian construction company Waskita Karya (33 percent) for the development of this toll road. In recent years Waskita Karya has been increasingly focusing on the development of toll roads across Indonesia. However, the company struggles to obtain the necessary financial resources to finance these projects.
Regarding the year 2018, Bali's Investment Board targets to collect at least IDR 18 trillion (approx. USD $1.3 billion) in total investment.
• Foreign Investment in Indonesia Section