Indonesia, Singapore partner on solar supply chain in Riau Islands

Indonesia and Singapore have signed a memorandum of understanding to develop a solar manufacturing supply chain in Indonesia’s Riau Islands province, as part of broader plans to enable cross-border clean energy trading.

Indonesia and Singapore have agreed to build a solar panel industry in the Riau Islands.

The agreement includes plans to develop an integrated green industrial zone in the Indonesian province to support cross-border clean energy trading between the two countries. The zone will be located in the regency of Karimun and on the island of Bintan, both near Singapore.

According to a press release from Indonesia’s Ministry of Energy and Mineral Resources, carbon capture and storage (CCS) technology will also be deployed in the zone, supported by a separate agreement.

Indonesian Energy Minister Bahlil Lahadalia confirmed that the production of solar panels and cables will be part of the agreement. He said this would create new opportunities for the solar energy market. He also said CCS technology would offer solutions for hard-to-decarbonize industries.

“The total investment in this project alone is already around $10 billion, and the important thing is that potential investors are already identified,” added Bahlil.

A separate news release from the ministry said the $10 billion capital scheme, backed by both governments, will be carried out in three phases. The first will cover the construction of solar panels, followed by a second focused on carbon capture and storage (CCS) facilities, and a third that will “unite manufacturing, technology and logistics supply chains with low carbon emission standards.”

The integrated green industrial zone is expected to create tens of thousands of jobs, starting with solar panel manufacturing and battery energy storage operations and maintenance. It is also projected to generate up to $6 billion in additional annual foreign exchange. The agreement follows three other clean energy cooperation deals between the two countries in recent weeks.

Indonesia’s cumulative solar capacity surpassed 700 MW in August 2024, according to the Institute for Essential Services Reform.

Singapore’s total solar capacity reached 1,157 MW at the end of 2024, up from 919 MW the year before, according to the International Renewable Energy Agency (IRENA). In November 2024, research from the National University of Singapore indicated that the country could reach its 2 GW solar installation target by 2028, ahead of its 2030 deadline.