JAKARTA (Reuters) -South Korea’s LG Energy Solution has formally withdrawn from a 142 trillion rupiah ($8.45 billion) project in electric vehicle battery making in Indonesia, the company said on Monday.

LGES and the Indonesian government signed a deal on the so-called Indonesia Grand Package project in late 2020, which include investments across the EV battery supply chain.

"Taking into account various factors, including market conditions and investment environment, we have agreed to formally withdraw from the Indonesia GP (Grand Package) project," LGES said in a statement.

"However, we will continue to explore various avenues of collaboration with the Indonesian government, centring on the Indonesia battery joint venture, HLI Green Power," it added.

HLI Green Power is a joint venture led by LGES and Hyundai Motor (OTC:HYMTF) Group. The company last year inaugurated Indonesia’s first battery cell production plant for EVs with annual capacity of 10 Gigawatt hours of battery cells, with plans to expand the capacity in the second phase of investment.