Israeli money likely to see biofuel production in Kupang

Yemris Fointuna, The Jakarta Post, Kupang

Despite strong opposition from circles in Jakarta, Israeli money is set to pour into East Nusa Tenggara after Kupang's administration this week gave the green investment light to the Israeli-based international project development company Merhav Group.

Kupang Regent Ibrahim Agustinus Medah said Tuesday he had discussed the US$700-million business committment with various parties and he had been assured the business venture "had nothing to do with diplomatic relations between two countries".

"Like Taiwan, for example ... it has no diplomatic relations with Indonesia, but its investments are nearly everywhere (in Indonesia)," Medah said.

Medah said he had been told the Israeli company would not operate directly in the field, but would be represented through a company based in Uzbekistan.

The Merhav Group of companies operates on a global scale and through various subsidies is traded on NASDAQ and owns 51 percent of Israel's second largest commercial television station.

"The Kupang regental administration will provide facilities and give principal license to PT Manhattan Capital, a local broker which will cooperate with the Uzbekistan's firm," Medah said.

"But the Kupang regental administration will still ask for permission from the central government (if) it can ahead with the plan."

Medah said Merhav Group would develop jatropha nut plantations for biofuel production. Jatropha oil is extracted from the plant's seeds as a vegetable oil and involves just one stage to convert to biodiesel.

The Israeli group would also develop ornamental plants for export.

The last meeting held between Medah and Merhav Group executive Gideon Weinstein and directors Jacgues Eshel and Yosef Ziv Sudiro was to discuss details of the investment plans.

The two parties agreed to set up a team to manage a feasibility study in five districts for the jatropha plantation.

Medah said the group wanted to develop jatropha plantations on 50,000 hectares in the districts of East, West and South Amarasi, Amarasi and Sulamu, with an initial investment commitment of US$350 million.

If the first stage is successful, the plantations would be expanded to cover 100,000 hectares, with a total investment commitment of $700 million.