The Asian Development Bank (ADB) granted Indonesia USD 100 million in October 2019 to help catalyze private sector investments in Infrastructure projects. ADB’s assistance will help close the Infrastructure financing gap, with annual investment needs estimated to be more than USD 70 billion. The loan will support projects in the health, renewable energy, telecommunication and transportation sectors.
Under the Leveraging Private Infrastructure Investment Project, the government will onlend the ADB loan proceeds to PT Indonesia Infrastructure Finance (IIF) through PT Sarana Multi Infrastruktur (SMI), a state-owned enterprise. SMI and IIF are important institutions in Indonesia’s Infrastructure financing landscape that provides project finance, advisory services, guarantees and project development support to Infrastructure projects.
Indonesia state-owned enterprises face difficulties accessing large long-term sources of funding. State firms in charge of Infrastructure development relied on creative financing scheme such as bond issuances, bank loans, asset securitization, project bonds, global-rupiah denominated bonds and limited participation mutual funds.
(Sources: The Jakarta Post; ADB)