Indonesia offered investment opportunities in 35 infrastructure projects worth $30.5 billion at this year’s Nomura Investment Forum Asia, which took place in Singapore this week, National Development Planning Minister Bambang Brodjonegoro said in a statement on Wednesday (07/06).
“Infrastructure development is an important focus of President Jokowi and Vice President Jusuf Kalla’s administration to improve connectivity, reduce discrepancy between areas, to support village and town development,” Bambang said in the statement, referring to President Joko Widodo by his popular nickname.
“The most important thing is that proper infrastructure can reduce excessive costs in the economy,” he added.
The minister said the government offers a public-private partnership scheme for 31 projects and four projects under the nongovernment investment financing scheme, which includes port developments, highways, railways, communication infrastructure and satellites.
The nongovernment investment financing scheme consists of 20 percent to 30 percent of equity financing, 70 percent to 80 percent project loans and infrastructure bonds. Bambang said the government prefers this scheme because it does not need support from the state budget.
“The government will push the nongovernment investment financing scheme in the future because the potential to accelerate infrastructure development across Indonesia is tremendous,” he said.
Various developments in Indonesia, including the electricity grid project, roads, railways, airports, dams and ports, require additional sources of funding because the state budget can only cover Rp 1,500 trillion ($112 billion) of the estimated total of Rp 4,900 trillion for the 225 national strategic projects proposed by the president until 2019.
Nomura Investment Forum Asia was attended by 200 top investors and asset managers from around the globe.
Bambang said during the event that Indonesia could reap up to $200 billion in investment following the recent credit ratings upgrade by Standard and Poor’s.
“After the investment grade, I believe there will be more than $100 billion or [even] $200 billion in potential investment,” he said. “Not only in government bonds, but also stocks and corporate bonds.