The Indonesian Investment Authority (INA) agreed to provide around 39 trillion rupiah (USD 2.7 billion) for toll roads on the islands of Java and Sumatra. The INA signed agreements with state construction firm Hutama Karya, to invest in three parts of the Trans Sumatra toll road; and with Waskita Toll Road, a unit of another state-owned construction firm, Waskita Karya, on the start of a transaction for two parts of the Trans Java toll road.
According to the Indonesian president, Joko Widodo, signings are INA’s first concrete steps since forming a toll road fund last year of up to $3.75 billion. The signings and INA’s good governance would create greater trust in infrastructure financing in South East Asia’s largest economy, from both domestic and international investors.
INA’s chief executive Ridha Wirakusumah said that the fund would also be invested this year for projects such as seaports, geothermal, and healthcare projects. The wealth fund’s assets under management amounted to nearly $6 billion, but it aims to grow the figure to between $15 billion to $20 billion within three years, supported by help from co-investors. Unlike many other sovereign wealth funds, which manage excess oil revenues or foreign exchange reserves, the INA seeks foreign funds as co-investors to finance the country’s economic development.
(Sources: Asianikkei; Reuters)