Indonesian sovereign wealth fund Danantara plans to sign a US$8 billion engineering, procurement and construction contract with US engineering firm KBR Inc to build 17 modular refineries, according to Reuters, citing two sources familiar with the matter.
The contract is part of last week’s trade pact between Indonesia and the US in which the US reduced its proposed tariff on Indonesian goods from 32% to 19%, the news agency says in a report on July 24.
According to the report, Airlangga Hartarto, Indonesia’s economic minister and the country’s chief negotiator of the trade pact, disclosed the plan for the refinery contract at a closed-door briefing to local business leaders on July 21.
Spokespersons for Danantara and KBR did not immediately respond to questions from Asia Asset Management.
Launched in February, Danantara controls over $900 billion worth of assets. The wealth fund was formed as part of the government’s plan to accelerate Indonesia’s economic growth to 8% from the current 5%.
