Investment from France in Indonesia Continues to Increase Since 2019

TEMPO.CO, Jakarta - The recent visit of French President Emmanuel Macron to Indonesia from May 27-29, 2025, has provided significant momentum to the economic relationship between the two nations. The strengthening ties are evident in the increasing investment value observed over the past several years.

Anindya Bakrie, the Head of the Indonesian Chamber of Commerce and Industry (Kadin), said that France is the second-largest investor from the European Union in Indonesia.

"Their interest in investing in Indonesia remains strong, as demonstrated by the numerous parties that have shown serious attention to the Indonesian market," Anindya said at the Indonesia-France business forum at the end of January 2025, as reported by Antara on February 22, 2025.

Data from the Central Statistics Agency (BPS) reveals a substantial increase in French investment in Indonesia over the past six years. In 2018, French investment totaled US$49.63 million across 408 projects, followed by a significant surge to US$167.35 million in 2019.

In 2020, the investment value from France experienced a temporary dip to US$25.10 million despite an increase in the number of projects to 1,079. However, by 2021, investments from France rebounded to US$145.80 million with 709 projects. This upward trend continued into the following year, with foreign direct investment from France reaching US$252.90 million across 1,160 projects in 2022.

In 2023, French investments further increased to US$302.80 million, distributed among 2,604 projects across various sectors. This growth persisted into 2024, with French investments reaching US$328.10 million involving 6,437 projects.

These investment numbers do not include areas like oil and gas, banks, non-bank financial companies, insurance, leasing, stock market investments, and household spending. The projects are counted individually. Meanwhile, the total value of trade between the two countries in 2024 was US$2.4 billion.

With such a large amount of investment, France is now the 11th biggest foreign investor in Indonesia worldwide. Anindya believes that this increase in investment shows that French investors have a lot of trust in the business environment in Indonesia, especially in areas like renewable energy, infrastructure, and technology.

Several large French companies have already invested in Indonesia. For example, Eramet is in the mining and metals industry, TotalEnergies is in renewable energy, and Alstom is in transportation. Also, medium-sized French companies are starting to show interest in entering the Indonesian market, particularly in construction, new technology, and infrastructure.

One key strategic collaboration under exploration is the development of a green hydrogen project on Sumba Island, East Nusa Tenggara, between PLN and HDF Energy. Additionally, France is keen to support the strengthening of Indonesia's electric vehicle ecosystem, aligning with the government's vision to accelerate energy transition and the industrialization of critical minerals.

Anindya is optimistic that the cooperation between France and Indonesia will be further solidified by French President Emmanuel Macron's visit. "Indonesia and France play significant roles in their respective regions. These two regions are complementary rather than competitive," Anindya said in a written statement on Thursday, May 29, 2025.

Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized France's role as a crucial partner in strengthening Indonesia's trade and investment sectors.

"Indonesia has more than 20 special economic zones (SEZs) spread across various regions, which can serve as strategic locations for French investments in Indonesia," Airlangga noted in an official statement during the reception of the MEDEF International delegation, led by Philippe Louis-Dreyfus, Chairman of the France-Indonesia Business Council, in Jakarta in February 2025.

Melynda Dwi Puspita contributed to the writing of this article.

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