INA: 80 global investors interested in investing in infrastructure sector
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 - INA: 80 investor global tertarik berinvestasi di sektor infrastrukstur
21 September 2021
By: Indah Handayani
Jakarta – Indonesia Investment Authority (INA) is considering 80 global investors who are interested in investing in the infrastructure sector in Indonesia through INA. INA spokesperson, Masyita Crystallin, said that infrastructure construction in Indonesia was the main reason why INA was established as the institution was expected to be an alternative funding for infrastructure construction, such as ports, airports, toll roads, digital infrastructure, and others.
“All of this is in our pipeline. Those infrastructures are attracting global investors, and some of them [investors] have started discussions,” Masyita revealed during a media gathering in Jakarta on Tuesday (21/9).
According to Masyita, global investors are interested in investing as Indonesia is reckoned to have a great growth potential that is support by a growing middle income. Another important reason is that Indonesia still holds the investment grade rating amid the global pandemic, even though there are many developing countries that lost the rating. Hence, the yield potential of investing in Indonesia is more interesting.
“It is no wonder that there are 80 global investors who have come and stated their interest to invest in Indonesia. Peculiarly, they are interested in all infrastructures in Indonesia,” she stated.
Masyita revealed that this was proven by investments from three sovereign wealth funds (SWFs), namely Abu Dhabi Investment Authority (ADIA), CDPQ which is a pension and insurance fund company from Quebec in Canada, and APG which is the largest pension fund in the Netherlands. The three SWFs are interested and agree to make a thematic infrastructure investment in the toll road sector of up to US$3.75 billion or around Rp54 trillion.
“We are currently preparing the assets. The three [SWFs] have come to Indonesia to make sure everything [goes well]. We have even received the investment funds,” she explained.
Moreover, she continued that several investors had stated that they wanted to invest in ports in Indonesia. However, Masyita is still reluctant to provide further explanation. She only mentioned that INA was currently still preparing the port assets that would be offered, and she hoped that they could be offered to the global investors soon. Besides ports, digital infrastructure is also attracting many investors.
However, Masyita affirmed that INA could not blindly receive incoming investments as they must also consider the experience and the trustworthiness of the investors in certain sectors, not only the funds. Hence, she said that, in the future, she hoped that a transfer of knowledge on how to handle the infrastructure assets that would be managed could be carried out.
INA’s presence
Previously, Indonesian Toll Road Association (ATI) Secretary General, Kris Ade Sudiyono, said that his association welcomed INA and hoped that the institution could be a driver for infrastructure provision in Indonesia. Besides that, INA can be an alternative asset recycling method that can be used by the association to resume infrastructure construction in Indonesia.
“INA is expected to provide a solution, so a quick collaboration is required as the problem is in the implementation,” Kris said recently.
ATI Treasurer, M. Ramdani Basri, also revealed that toll road enterprises welcomed INA. This is one of the government’s efforts to develop toll roads in Indonesia. Moreover, similar institutions have been implemented in several countries to construct infrastructure more quickly, such as Uni Arab Emirates and Singapore. However, INA still needs several aspects that must be mutually understood and agreed on as INA functions as a strategic investor, not a financial institution.
“Hence, they will seek a return before investing in a project. So, we are worried that the financial institution will not purchase assets or projects that are expensive with low daily traffic,” Ramdani added.
According to Ramdani, it will be difficult if the financial institution only wants to invest in toll road projects with high daily traffic as toll road enterprises will be reluctant to sell. With the current condition, he admits that he cannot hope for much. However, ATI wants INA to understand the situation so that they can reach a win-win solution.
“I hope that they want to see projects in poor condition and to become a bridge so that toll road enterprises can receive fresh money to invest in future projects, where we hope the situation will improve. However, the implementation is not easy, we hope that there will be a win-win solution for concession holders and INA,” he added.
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