The International Finance Corporation (IFC), a member of the World Bank Group, is planning to invest up to US$400 million annually in a five-year program in Indonesia,
Adam Sack, IFC's country manager for Indonesia, said Thursday the program aimed to improve the quality of life for 41 million Indonesians and reduce 180 million tons of CO2-equivalent greenhouse gases.
As of June 30, 2009, IFC had invested $968 million in Indonesia, mostly in financial markets, followed by agribusiness and manufacturing.
"As well as our own funds, we can mobilize long-term capital from third parties," Adam said.
He added that, for the next five years, the IFC would also facilitate $13 billion in investments, including $6.13 billion in infrastructure, $4.5 billion in agribusiness and forestry, and $2 billion in finance.
One of IFC's main aims is to invest in infrastructure that supports sustainable urbanization, such as transportation and logistics, water treatment, distribution of clean water, and waste management, primarily in Indonesia's main and secondary cities.
"IFC will support private companies that play a critical part in providing basic service for urban people, like PT Palyja, which supplies clean water to Jakarta," Adam said.
Similar schemes could be also implemented in other cities with other private companies, he added.
For the electricity sector, Adam went on, the IFC would only support the development of power plants that used renewable resources, like hydro, geothermal, and bio mass resources.
"Our future projects must promote eco-standard certification like CDM *Clean Development Mechanism* and RSPO *Roundtable on Sustainable Palm Oil*," he explained.
IFC, however, is not able to invest directly in state-owned firm like PT. PLN as IFC's mandate "is to support economic development through the private sector", Adam said.
According to 2006 data obtained by the IFC, Indonesia had 27,000 megawatts (MW) of potential electricity from geothermal resources but only 807 MW had been exploited. The data also shows that out of 75,670 MW of potential electricity from hydro resources, only 4,200 had been exploited.
