Indonesia, DP World funds Malacca Straits’ new container terminal

Indonesian port operator Pelindo and a consortium of the country’s sovereign wealth fund have entered an agreement to invest in the expansion of the Belawan New Container Terminal (BNCT) in Sumatra Island.

The deal is part of a $7.5 billion partnership between the Indonesia Investment Authority (INA) and UAE-based DP World, according to a joint statement by Pelindo and the INA.

Financial details of the transaction have not yet been disclosed.

Pelindo and the consortium will manage BNCT with the aim to transform the port into a major transportation and maritime hub in the Southeast Asia region – by increasing terminal capacity, direct calls, and connectivity with other ports.

Under the agreement, BNCT’s capacity will more than double to 1.4 million TEU in the next six years, which would strengthen Belawan’s position in the Malacca Straits, the firms said.

“The UAE will become our investment and economic partner in various sectors and will continue to support the transportation, infrastructure and investment in the future,” said Kartika Wirjoatmodjo, Indonesia’s Vice Minister for state-owned enterprises.

Wirjoatmodjo added that the deal is expected to be closed before the end of the year.

Belawan is currently a feeder for other large ports, including the Port of Singapore, Tanjung Pelepas and Port Klang in Malaysia.