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Toward efficient infrastructure financing
Who should build it? And, how should it be financed?
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Workers assemble box girders for the light rail transit (LRT) line in Kelapa Gading, North Jakarta on May 30. State-owned railway operator PT Kereta Api Indonesia (KAI) has obtained a Rp 2 trillion (US$150.2 million) state capital injection (PMN) to finance the project, which will allow it to access a syndicated loan from banks. (JP/Seto Wardhana)
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t the Indonesia Infrastructure Finance Forum on July 25, 2017 the two keynote speakers, Finance Minister Sri Mulyani Indrawati and the World Bank Group President, Jim Yong Kim, spoke on the need and the importance of improving Indonesia’s infrastructure systems.
They put forth that a better network of roads, ports, airports, communication trunk lines and water and wastewater facilities could make Indonesia products more competitive, increase quality of life and help alleviate poverty.
The forum raised the two most vexing questions facing all countries with large infrastructure needs and plans.
Who should build it? And, how should it be financed? While many answers to these questions were discussed at the forum, the overriding takeaway was that there needs to be more Public Private Partnerships (PPPs) and private party involvement in the Indonesia infrastructure build out.
