Indonesia's sovereign wealth fund Danantara and Saudi Arabia's ACWA Power Company recently signed two blockbuster memorandums of understanding (MoU) covering renewable energy, green hydrogen and desalination, with a total investment of US$10 billion. This cooperation is not only the core outcome of Indonesian President Prabowo's first state visit to Saudi Arabia, but also marks a new stage of international cooperation in Indonesia's energy transition.

Strategic layout: comprehensive efforts in multiple fields

According to the agreement, the two parties will focus on the development of solar and wind power generation and combined-cycle gas turbine projects, as well as green hydrogen production and large-scale desalination plants. Among them, ACWA Power will also work with Indonesia's national oil company Pertamina to develop 500MW of renewable energy and gas-fired power generation facilities, and participate in power tenders and hydrogen projects. Danantara CEO Losang said: "This will propel Indonesia to become a key player in the global energy transition. "

Technology empowerment: local implementation of global experience

As the world's leading private desalination company, ACWA Power currently has more than US$107.5 billion in assets under management, operating 78.9GW of power generation capacity and 9.5 million cubic meters per day of desalinated water capacity. Its Vice Chairman Ra'ad emphasized: "We will not only bring capital, but also share Saudi Arabia's technical experience in the field of new energy and desalination. "This cooperation is expected to introduce high-efficiency photovoltaic technology, hydrogen electrolyzers and other key equipment to Indonesia, and fill the gap in the local industry.

Market expansion: Southeast Asia is back in the picture

This is ACWA Power's third US$10 billion investment in Southeast Asia this year. Previously, the company has signed similar framework agreements with Malaysia and Vietnam, forming a new energy strategic triangle covering the three countries. Analysts pointed out that the Indonesian project will strengthen its technical adaptability of photovoltaic power stations in tropical areas and island desalination, and accumulate experience for the subsequent expansion of the Philippine and Thai markets.

Accelerating the transition: the countdown to 2060 carbon neutrality

The cooperation comes at a critical time in Indonesia's energy transition. The country plans to increase the share of renewable energy to 34% by 2034 and achieve an aggressive target of 87% by 2060. At present, Indonesia's power grid is still dominated by coal power, and it needs to attract more than 20 billion US dollars in green investment every year. ACWA Power's portfolio of projects will directly contribute about 5% of the planned capacity and provide peak shaving support for key regional grids such as Java-Bali.

In the joint statement between Jakarta and Riyadh, the two sides highlighted the synergy of "desalination-hydrogen" – an innovative model that could serve as a model for the energy revolution in island countries – using oxygen as a by-product of the desalination process to improve hydrogen efficiency. With the implementation of the agreement, the energy cooperation between Indonesia and Saudi Arabia has been upgraded from traditional oil and gas trade to the co-creation and sharing of green technologies, providing a new paradigm for climate governance in the Global South.(This article is from the official website of Seetao www.seetao.com. Reprinting without permission is strictly prohibited. Please indicate Seetao.com + original link when reprinting) Seetao.com Strategy Column Editor/Sun Fengjuan