Sumitomo, one of Japan’s largest diversified business groups, plans to invest in various energy projects valued at $10.1 billion in Indonesia as it tries to take advantage of the archipelago’s growing needs for electricity.

Sumitomo plans to invest in a number of power plant projects and a floating storage and regasification unit, Energy and Mineral Resources Minister Jero Wacik said on Tuesday.

At the State Palace, he introduced Susumu Kato, Sumitomo’s president and chief executive, at a meeting with President Susilo Bambang Yudhoyono.

“They [Sumitomo] want to boost their investment here on the country’s political stability and growing economy,’’ Wacik told reporters at the palace.

He said Sumitomo would build a $650 million geothermal power plant in Rajabasa, Lampung; a $700 million geothermal power plant in Muara Laboh, West Sumatra; a power transmission line connecting Java and Sumatra islands at a total value of $1 billion; and a coal power plant project in Indramayu, West Java, valued at $1.25 billion.

Jero also mentioned a regasification project with total investment at $4 billion, but he did not give any details of its location.

He mentioned Sumitomo’s plan to build a “future power energy” facility in Central Java that is estimated to cost $2.5 billion. However, he did not elaborate on the meaning of “future power energy.”

Indonesia’s $831 billion economy is forecast to continue expanding this year after growing 6.5 percent last year.

Rising consumer spending accounted for 56 percent of Indonesia’s economy last year and is expected to help drive further growth. Indonesia’s economy expanded by 6.5 percent last year, the fastest rate since 1996, when the economy grew by 8 percent.

Wacik said Sumitomo had invested as much as $5 billion so far in Indonesia, without elaborating on the projects in which it had invested.

On the same occasion, Kato said his company was committed to further investment in the country as it saw Indonesia as an “important partner.”

Foreign direct investment in Indonesia rose 18 percent last year to almost $20 billion from 2010 as investors were bullish on pouring money in the nation, which has an abundance of natural resources and a population of around 240 million people.

Other Japanese companies that have expressed interest in investing in Indonesia include auto maker Toyota Motor.

Trade Minister Gita Wirjawan, who also heads the Investment Coordinating Board (BKPM), said a high-ranking Toyota official would soon visit Jakarta and hold talks with Indonesian officials, including Industry Minister M.S. Hidayat and himself.

“They are trying to make huge investment with the goal to sell both in the domestic and export market,” Gita said on Tuesday.

Additional reporting from Investor Daily

Source: The Jakarta Globe