Palu pursues UAE investment partnership for Special Economic Zone expansion
The Palu City Government is exploring investment opportunities with the United Arab Emirates to develop its Special Economic Zone, leveraging strategic port access and proximity to Indonesia's new capital as key advantages for potential investors.
Indonesia's Palu explores UAE investment for Special Economic Zone
The Palu City Government is in talks with the United Arab Emirates to explore investment opportunities in the Palu Special Economic Zone, as part of broader efforts to attract foreign capital to the region's growing industrial hub.
Mayor Hadianto Rasyid met with UAE Ambassador to Indonesia Abdulla Salem Al Dhaheri on Tuesday to discuss potential partnerships, emphasizing the city's commitment to creating favorable conditions for investors. The visit marks the initial stage of information exchange to evaluate investment plans in the zone, first inaugurated in September 2017 as Indonesia's pioneering SEZ among 11 such zones nationwide.
The Palu City Government will provide streamlined licensing, support for infrastructure development, and ensure strong synergy with both the central government and the SEZ management.
Rasyid stated following the ambassador's tour of the 500-hectare zone, which focuses on basic metal industry and logistics development.
Strategic advantages draw international interest
Ambassador Al Dhaheri highlighted several factors that make Palu attractive for UAE investors. The city's central location in Indonesia and proximity to the new capital Nusantara position it as a potential major distribution and logistics hub for the archipelago.
Pantoloan Port stands out as a particularly valuable asset. The largest and busiest port terminal in Central Sulawesi Province, it serves as a trade gateway to eastern Indonesia and features a natural depth of approximately 18 meters, allowing large cargo vessels to dock without extensive dredging work. The port's capabilities were significantly enhanced following a USD 70 million reconstruction effort funded through the Asian Development Bank after infrastructure damage in 2018, demonstrating the government's commitment to rebuilding critical facilities.
The zone is managed by PT Bangun Palu Sulawesi Tengah, a local company under the Palu city administration, ensuring coordinated development alongside municipal authorities.
Growing Indonesia-UAE economic ties
The investment discussions take place against a backdrop of strengthening bilateral economic relations. Indonesia and the UAE signed a Comprehensive Economic Partnership Agreement in 2022, which took effect in 2023 and eliminated approximately 99 percent of existing tariffs between the two nations. This marked Jakarta's first free trade agreement with a Gulf country.
The partnership has delivered tangible results, with bilateral trade reaching USD 6.4 billion in 2025, a 27 percent increase from USD 5 billion the previous year. In February 2026, coinciding with the 50th anniversary of diplomatic relations, UAE President Sheikh Mohammed bin Zayed Al Nahyan pledged to increase investment in Indonesia during talks with President Prabowo Subianto.
Central Sulawesi's abundant nickel reserves and other mining commodities add another dimension to the region's investment appeal, particularly for battery and energy storage technology sectors that rely on these raw materials.
Local officials expect the preliminary engagement with the UAE to strengthen economic cooperation and attract new investments that will generate employment opportunities while establishing the Palu SEZ as a competitive investment destination within Indonesia's expanding network of special economic zones.