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Investors interested in real sector, market
Follow my lead: Maritime Affairs and Fisheries Minister Susi Pudjiastuti (center) talks to social innovation project head Siti Siswandari (left), accompanied by the ministry’s maritime and fishery products director general, Nilanto Perbowo, during the launch of digital application Laut Nusantara in Jembrana, Bali, on Wednesday
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ollow my lead: Maritime Affairs and Fisheries Minister Susi Pudjiastuti (center) talks to social innovation project head Siti Siswandari (left), accompanied by the ministry’s maritime and fishery products director general, Nilanto Perbowo, during the launch of digital application Laut Nusantara in Jembrana, Bali, on Wednesday. (Courtesy of the Maritime Affairs and Fisheries Ministry)
A number of investors from Europe and major Asian countries have indicated their keen interest to invest in the manufacturing sector and the capital market.
The chairman of the Investment Coordinating Board (BKPM), Thomas Lembong, said on Thursday that the European investors were mostly interested in infrastructure financing through asset securitization, while Asian investors from Japan, Korea, Singapore and China planned to enter the real sector.
Speaking at an investment forum, Lembong said that five institutions from China, Hong Kong, the Netherlands and Malaysia, had expressed their intention to invest a total of US$31.4 billion for infrastructure projects such as power plants, ports, construction and logistics.
The investment forum held by BKPM in cooperation with HSBC attracted at least 500 local and foreign businessmen. Other speakers in the forum included Transportation Minister Budi Karya Sumadi and Peter Wong, deputy chairman and chief executive of HSBC Asia Pacific.
Lembong said the government had implemented a number of policy measures to entice investors to take part in the country’s infrastructure development, one of the priorities in President Joko “Jokowi” Widodo’s economic agenda.
“It has long been the President’s priority to shift infrastructure financing to the private sector, and more importantly to the capital market,” Lembong said.
Especially in the current economic condition, with the rupiah continuing to depreciate against the US dollar, the country needs more capital inflows, which can be lured to Indonesia through asset securitization in the capital market.
Between 2015 and 2019, Indonesia needs Rp 4.79 quadrillion (about $315 billion) to finance infrastructure development. The government can provide 41.3 percent, while state-owned companies are expected to contribute 22 percent, and the remaining 36.5 percent is expected to come from the private sector.
“One of the solutions to getting such a huge amount of funds for infrastructure development is through the securitization of infrastructure through the capital market,” Lembong said.
He acknowledged that foreign investors were currently concerned about fluctuations in global currency exchange rates, including the rupiah. For this reason, he said, the government would create flexible and more dynamic investment instruments so they would feel more comfortable investing their money in the country.
Wong said the private sector played an important role in infrastructure development in Indonesia. According to the HSBC Asia Pacific chief executive, Indonesia as the fourth most populous country with a GDP of $1 trillion, was the right place to invest in.
At the same event, Budi said the government offered a number of large transportation projects to the private sector such as the Bandung, Surabaya and Medan light rail transit (LRT) projects, each with a value of between Rp 5 trillion and Rp 10 trillion.
Furthermore, the government also welcomes investors to invest in Kualanamu International Airport, a project worth between Rp 4 trillion and Rp 7 trillion; Lombok International Airport, worth Rp 4.9 trillion to Rp 8.2 trillion; and Kuala Tanjung Seaport, with a project value of Rp 3 trillion to Rp 5 trillion.
“We have ports, toll roads and airports that we have offered for investors through public private partnership schemes (PPP),” the minister told The Jakarta Post.
He claimed that so far a number of foreign investors were interested in investing in the Makassar–Parepare railway project and Komodo Airport in Labuan Bajo. “It is important to remember that the government is not selling assets, only providing them with limited concession cooperation, he emphasized.
