IFC may fund RI infrastructure projects

The Jakarta Post , Jakarta | Sat, 09/16/2006 8:17 AM | Business

The Jakarta Post, Jakarta

The International Finance Corporation (IFC), the World Bank's financing arm for the private sector, is pledging to provide investment for infrastructure such as roads, railways and power plant projects to be built by the Indonesian government, the agency's executive vice president Lars Thunell says.

""I met Vice President Jusuf Kalla Thursday. We discussed some projects and the possibility of IFC's involvement in the infrastructure sector,"" he said in a press briefing after concluding his two-day visit to Indonesia on Friday.

He, however, refused to cite the exact amount of funds the IFC wanted to invest in infrastructure.

""We understand that infrastructure development is a priority for the government. We're interested in investing in the sector to be able to develop a dynamic public-private partnership,"" said Thunell.

Vice President Jusuf Kalla said that Indonesia was offering Rp 500 trillion (US$54.9 billion) in road, railway and electricity projects for the next four years.

According to German Vegarra, the country manager of IFC in Indonesia and Malaysia, Indonesia needs a total investment of $10 billion per year in the infrastructure sector to enable it to grow by 7 percent per year.

IFC has provided $2.3 billion in financing projects in Indonesia during the last 35 years in the form of equity and loans for small and medium-scale companies.

The value of the agency's financing programs will increase to $350 million this year from $250 million in 2005. It will further raise the funding to $450 million in 2007.

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