05 May Indonesia, Third Largest Producer of Footwear for the U.S., to Boost Financing for Roads and Airports
PT Indonesia Infrastructure Finance plans to raise by at least 60 percent the funding that the government-backed company provides to help build roads, power plants and airports in Southeast Asia’s largest economy.
The financial institution will increase loans this year to more than 4 trillion rupiah ($347 million), from 2.5 trillion rupiah last year, its President Director Sukatmo Padmosukarso said in Jakarta on May 2. Padmosukarso is meeting potential investors in Singapore today and then in Japan and Hong Kong on a roadshow, he said.
Indonesia’s Ministry of Finance set up the company in 2010 to provide long-term funding and help kick-start transportation and power projects across the archipelago, as the nation seeks to catch up with its neighbors in physical development. A lack of infrastructure is the main obstacle for investors, Mahendra Siregar, the country’s investment chief, said last month.
“The government really understands that Indonesia already lags behind neighboring countries on infrastructure,” Padmosukarso said in an interview.
Shareholders in the company include Indonesia’s government, the World Bank’s International Finance Corp. and Sumitomo Mitsui Banking Corp, according to Padmosukarso.
Foreign direct investment growth dropped to 9.8 percent in the January-March quarter, from 25.4 percent in the previous three months, according to government data. That contributed to first-quarter gross domestic product growth that missed economists’ estimates at 5.21 percent, data from the country’s statistics agency showed today.