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STRATEGIC ASSESSMENT. The U.S. government, through USAID, and the Indonesian government, represented by the National Development Planning Ministry/National Development Planning Agency (Bappenas), agreed to extend the current Bilateral Development Cooperation Framework (BDCF) until September 2026, with an additional commitment of $150 million from USAID, raising USAID’s investment in Indonesia to $800 million since 2020.
Ambassador Lakhdhir said that U.S. companies are interested in investing in Indonesia’s renewable energy sector in response to the government’s estimate that the energy transition will cost $235 billion. She said the future development of Indonesia’s energy transition would require the involvement of the private sector, as well as enormous investments in the construction of new 100 gigawatts of electricity infrastructure in order to transition energy and reduce carbon emissions.
Ambassador Lakhdhir said that a new $649 million grant from the U.S. MCC announced earlier this year will double U.S. development assistance to Indonesia over the next five years. Ambassador Lakhdhir said the assistance adds to development assistance from the U.S. Agency for International Development (USAID) of about $130 million per year. The ambassador said the new MCC Compact II is intended to increase access to infrastructure financing, particularly transportation and logistics infrastructure, and support for women-owned small businesses. She said the total U.S. assistance is closer to $700 million over five years, when including the $49 million co-invested by the Indonesian government.
