The board of directors of Export-Import Bank of the United States (US Exim) has voted to approve US$99.7 million of support for the expansion and upgrade of Pertamina’s Balikpapan oil refinery on Borneo Island in East Kalimantan, Indonesia.
“This project would support hundreds of US jobs at dozens of manufacturers across the country, and allow Indonesia to substantially reduce its reliance on imported, refined transportation fuels while upgrading to a cleaner standard, protecting human health and the environment in the process,” says US Exim chair Reta Jo Lewis.
The Balikpapan refinery expansion project has been classified by the Government of Indonesia as a national strategic project.
Indonesia currently imports 70% of its gasoline, and has been exposed to dramatic price fluctuations for imported fuels since the beginning of the war in Ukraine.
According to US Exim, the project underwent a feasibility review and alignment with its environmental and social due diligence procedures and guidelines, which must be adhered to throughout the life of the transaction.
Because of participation by US manufacturers and Exim’s board action, Indonesia will be able to substantially reduce its reliance on imported, refined transportation fuels while producing cleaner gasoline products.
Climate change activist groups reacted by accusing US President Joe Biden of violating his pledge to end public financing of overseas fossil fuel projects.