Amid slower expansion in the banking industry, State-Owned Enterprises (SOE) Minister Rini Soemarno has pushed SOEs to raise funds from the capital market to oil the country’s ambition for infrastructure, despite Finance Minister Sri Mulyani Indrawati’s warning over state power firm PLN’s excessive debts.

PLN, the country’s most indebted SOE, is maintaining its plan to issue Rp 2.5 trillion (US$185 million) in bonds in October, part of a group of SOEs set to raise a total of Rp 31.87 trillion in proceeds, consisting of Rp 22.1 trillion in bonds and Rp 9.77 trillion in equity issuances, in the remaining months of the year.

Rini said the capital market could support government programs such as toll-road development and the ambitious 35-gigawatt electricity program. From September 2014 to September this year, SOEs built 560-kilometers of toll roads and saw 46 percent progress in power plant construction.

“Infrastructure projects need a lot of money, so we need to seek funds from both domestic and global markets,” she said on Thursday.

Rini believes such moves would not lead to the crowdingout effect, where an oversupply of bonds would force issuers to set higher interest rates to attract investors, as the SOEs had diversified the instruments.

After PLN and toll road operator PT Jasa Marga launch their asset-backed securities in the third quarter, the two firms will issue rupiah-denominated bonds worth Rp 1.5 trillion and Rp 2.5 trillion, respectively, in the fourth quarter.

Within the same period, Jasa Marga along with construction company PT Wijaya Karya are set to launch “komodo bonds” in November. They will be the first rupiah-denominated global bonds to be listed on the London Stock Exchange.

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