04/06/2012 (Jakarta Globe) - Nigeria-based Bakrie Delano Africa plans to spend half of the company’s $1 billion investment commitment in the country on crude palm oil and rubber plantations, its chief executive said in Jakarta on Tuesday.

Bakrie Delano is a joint venture of Bakrie Group and British-Nigerian businessman Ladi Delano.

In December last year the company signed a memorandum of understanding with the Nigerian government over a $1 billion investment commitment in Nigeria over the next five years.

“The $1 billion investment will be disbursed gradually. In its early stages, we will invest $500 million,” Ladi Delano, the chief executive officer of Bakrie Delano, said on Tuesday.

Seng Hoo Ong, a director at Bakrie Delano, said the company would also acquire plantation companies in Nigeria, which already produces vast amounts of palm oil and rubber.

He said some of the $500 million investment would be allocated to buy land. “It will not be greenfield land,” Ong said, referring to the land they are eyeing.

Ong declined to reveal how Bakrie Delano would finance the investment plan, but did not rule out the possibility of seeking funding from the capital market.

“We can’t reveal anything further yet,” he said.

Delano said the company would also invest in the oil and gas sector in Nigeria, a country in West Africa plagued by endemic corruption, impunity, state-sanctioned violence and insurgency.

A former president of Nigeria, Olesogun Obasanjo, recently said that he supported the plan, as the country is one of the biggest crude oil producers in the world. Obasanjo was visiting Indonesia on Sunday and Monday.

He said Nigeria and Indonesia both had great economic prospects in the years to come. “Nigeria now is the second biggest country [in Africa] in terms of gross domestic product,” he said.

Delano said he picked the Bakrie Group due to its experience as a diversified business group. “We need a group with a good track record from a country that is nearly the same as Nigeria,” he said. “In Nigeria, the major business is oil and gas, that’s why we need a partner who can diversify businesses in some primary sectors.”

He said Bakrie Group’s investment in Nigeria would also open up other investment opportunities in Africa.