SMI transformation to strengthen regional financing
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Transformasi SMI untuk memperkuat pembiayaan di daerah
12 December 2024
Bali, ID – To meet the growing demand for infrastructure development, the Government is encouraging PT Sarana Multi Infrastruktur (SMI) to transform into a development finance institution (DFI). Through this transformation, SMI will be able to contribute more significantly to regional development.
SMI President Director Reynaldi Hermansjah stated that SMI is often described as a "mini World Bank," acting as a multilateral financial institution similar to the World Bank. While the World Bank provides loans to countries, SMI focuses on a smaller scale by offering support and financing to regional governments.
"A mini World Bank is like a financial institution that provides support to regional governments in Indonesia to boost regional development," Reynaldi said at a media gathering at the Hyatt Regency in Bali on Tuesday (10/12/2024).
According to SMI's data, its financing for regional governments is still relatively small, at Rp39.98 trillion, compared to Rp82.38 trillion for the private business sector. To better fulfil its role as a DFI, SMI aims to increase its financing portion for regional governments. "We are in the process of transformation and want to pursue more financing in the regional government sector so that our role as a DFI can be fully realised," Reynaldi stated.
Specifically, the Rp39.98 trillion is divided into Rp35.27 trillion for the national economic recovery (PEN) programme aimed at regional governments and Rp3.7 trillion for regular financing to regional governments. Funds from the PEN programme have been distributed to 92 regional governments. Meanwhile, the regular funds, amounting to Rp3.7 trillion, have been distributed to 13 regional governments.
Financial performance
On this occasion, SMI forecasted a business profit of Rp2.1 trillion by the end of this year. By September 2024, the company had already logged a profit of Rp1.8 trillion. "We are targeting a net profit of approximately Rp2 trillion to Rp2.1 trillion, which, inshallah (God willing), we can achieve by the end of this year," he explained.
By the end of September 2024, SMI had recorded a business revenue of Rp5.77 trillion. Meanwhile, the company's total assets are expected to reach Rp115.64 trillion by the end of this year. These assets include two main components: financing and investment valued at Rp93.14 trillion and interest-bearing liabilities (IBL) amounting to Rp70.53 trillion.
