UPDATE 1-Indonesia to relax foreign ownership rules in power, e-commerce, retail sectors

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JAKARTA, Feb 3 (Reuters) - Indonesia will relax foreign ownership rules in the power, e-commerce and retail sectors, the head of the investment board said on Wednesday.

The moves are part of a review by Indonesia’s Investment Coordinating Board (BKPM) of the country’s “negative investment list, which covers sectors in which restrictions on foreign investment apply. The board hopes to complete the revisions by March.

Among the changes, foreigners will be allowed to fully own geothermal power plants of more than 10 megawatt (MW), though ownership for smaller geothermal power plants will be capped to 67 percent, the head of BKPM Franky Sibarani told reporters.

Currently, foreigners are allowed to own 95 percent of geothermal power plants but are not allowed to have any stake in smaller plants.

Investment in high and extra high voltage power installation services will be made 49 percent open to foreign money, Sibarani added, without mentioning further details. Foreigners cannot take stakes in such projects currently.

Sibarani also said the government will allow foreigners to fully own e-commerce businesses, a sector which was not covered in the list before.

“For retail, we haven’t reached a decision yet. But the essence is that we will make it more open, but we will not let there be foreign majority,” said Sibarani.

The board has previously announced its intention to relax rules in the tourism and movie industries, and was considering allowing foreigners to own 100 percent of businesses which make drug ingredients.

Foreign direct investment into Indonesia, according to BKPM data, reached $29.28 billion last year, up slightly from $28.5 billion in 2014, with mining, transportation, telecommunication and mineral-processing sector being the biggest beneficiaries.

Indonesia’s economy is expected to have grown 4.75 percent in 2015, the weakest since 2009, amid plummeting commodities prices and tepid global demand.

President Joko Widodo has said he wants to broaden the industrial base to counter a slowdown in commodities sector. He is counting on investment in manufacturing to reach the 7 percent growth rate he promised when campaigning to become Indonesia’s president. (Reporting by Hidayat Setiaji; Writing by Gayatri Suroyo; Editing by Jacqueline Wong and Kim Coghill)