Expert Interview: Indonesian Nickel - Powering the Energy Transition

Why is Indonesian nickel crucial for the energy transition?

The energy transition requires decarbonising transportation amongst others, and electric vehicles represent one of our most actionable levers to reduce greenhouse gas emissions in this sector. Despite recent fluctuations, EV adoption continues to accelerate globally, from 20% of car sales in 2024 to more than 25% in 2025 as estimated by the International Energy Agency (IEA). High-energy density batteries, particularly those using NMC (Nickel, Manganese, Cobalt) chemistry, are essential for premium EVs. The equation is simple: energy transition needs EVs, EVs need batteries, and high-performance batteries need nickel. Indonesia holds a commanding position in this market, accounting for over 60% of global nickel production and 25% of reserves. Indonesian nickel occurs in lateritic deposits with two layers: a top limonite layer (low-grade) and a bottom saprolite layer (higher-grade). Traditionally, only saprolite could be processed using pyrometallurgy, mainly for stainless steel production. Chinese R&D investments over the past decade have improved High Pressure Acid Leach (HPAL) technology, a hydrometallurgical process that can transform previously underutilised limonite into battery-grade Class 1 nickel. Adapted for Indonesian conditions, it is now proven at commercial scale. Combined with its cost competitiveness, this gives the country a significant advantage in the global market. Its abundant resources, relatively low labor costs, and developing integrated supply chain have transformed Indonesia from an ore exporter into an increasingly important player in the EV battery supply chain.

Hicham Chami

Director Energy and Infrastructure Group Asia

Indonesia has ambitious plans to move beyond mining and capture more value across the entire EV supply chain. The government's ban on raw nickel ore exports has effectively forced foreign players to invest in local processing facilities, creating integrated industrial ecosystems. The sector now features a diverse set of participants. Local miners are partnering with Chinese technology leaders. What's changing the landscape even further is the entry of international strategic investors – automakers, battery manufacturers, commodity traders, and international miners. These partnerships are creating integrated value chains from mine to battery, with industrial parks concentrated in Sulawesi and North Maluku provinces.

Hicham Chami

Director Energy and Infrastructure Group Asia

These projects need large investments in Asia, with average HPAL projects typically requiring USD 1-3 billion in debt financing (depending on the capacity). The financing landscape is undergoing a significant transformation. Historically, these projects were financed almost exclusively by Chinese or Indonesian banks through corporate finance structures backed by sponsor guarantees. Now, with international sponsors entering the market, we're seeing a shift toward project finance transactions with international lenders. Crédit Agricole CIB is actively positioning itself in this evolving market. We are currently involved in several landmark transactions that exemplify the convergence of local resources, Chinese technology, and international demand. These projects now routinely involve key global clients of the Bank, including major automotive manufacturers, battery producers, and mining companies seeking to secure their supply chains, demonstrating the strategic importance of Indonesian nickel in the global transition to electric mobility.

Hicham Chami

Director Energy and Infrastructure Group Asia

While the opportunities are substantial, we must navigate several challenges. Market volatility in EV adoption, competition between battery chemistries, and rapid scaling of production all create uncertainty. The growing focus on ESG practices is both a challenge and an opportunity. International lenders and sponsors are demanding higher environmental and social standards, driving investments in better technologies and mitigation measures along the value chain. This will ultimately improve the sector's sustainability profile and help meet global standards. Another challenge is the need for greater alignment on technical standards, guarantees, and offtake specifications as the market becomes more sophisticated. For Crédit Agricole CIB, our extensive experience in energy transition financing, combined with our in-depth knowledge of the nickel sector, developed collaboratively with our internal experts, positions us well to support this growing market. Our strength lies in structuring complex transactions with robust contractual frameworks and comprehensive due diligence, particularly important as ESG baselines continue to tighten. With our connections across the entire value chain and our commitment to financing the energy transition, we're strategically placed to play a leading role in this critical sector

Hicham Chami

Director Energy and Infrastructure Group Asia

Indonesia is the largest economy in Southeast Asia and is positioning itself as a key EV hub in the supply chain by taking advantage of its abundant nickel reserves. By leveraging on our close relationships with international sponsors investing massively in the nickel value chain in Indonesia, on our expertise in structuring complex transactions, and on our global ESG leadership, the Bank has a solid standing to further expand business in the near future.

Alexis Rafidison

Senior Country Officer Indonesia

The Indonesian nickel sector represents a strategic opportunity to leverage our mining expertise and to play a crucial role in the energy transition, by supporting the mining of the minerals needed to meet growing demand for battery materials. Focused on projects that strengthen sustainable supply chains, Crédit Agricole CIB’s international presence and industry knowledge position us uniquely to connect key stakeholders and facilitate investments that will shape the future of this critical sector.

Sophie Loiodice

Global Head of Resources and Industry

The convergence of available mineral resources, cost competitiveness and need for global industrial expertise and investment creates unique opportunities for Crédit Agricole CIB’s clients in Indonesia’s nickel sector. Our teams are committed to developing innovative solutions that address the complex needs of these transformative investments. With responsible nickel production being critical to the development of the EV industry, we're dedicated to supporting Indonesia's position as an anchor in this global supply chain through sustainable financing approaches and cross-sector expertise.

Romain Voisin

Head of Energy and Infrastructure Group Asia