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IIGF invites private sector to partake in developing infrastructure
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Representatives of the Indonesia Infrastructure Guarantee Fund (IIGF) and Infrastructure Asia (InfraAsia) pose with the memorandums of understanding they signed to collaborate on various aspects related to infrastructure, including market awareness, consultation and de-risking facilities, during the Asia Infrastructure Forum 2024 that ran from on June 4 to 5 at the Suntec Singapore Convention & Exhibition Center in Singapore.
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T Penjaminan Infrastruktur Indonesia (PT PII), better known as the Indonesia Infrastructure Guarantee Fund (IIGF), was recently on the international stage as the Special Mission Vehicle (SMV) of the Finance Ministry, taking an active part in Asia Infrastructure Forum 2024, the foremost forum for infrastructure players in Asia, at Suntec Singapore Convention & Exhibition Center, Singapore on June 4-5.
Asia Infrastructure Forum 2024 was organized by Infrastructure Asia (“InfraAsia”) with IIGF playing the role as a program partner.
At the two-day international event, IIGF inaugurated a collaboration with InfraAsia, an agency that is part of Enterprise Singapore and the Monetary Authority of Singapore whose mission is to support social and economic growth through the development of infrastructure in partnership with various stakeholders, including the government and private sector in Singapore and the surrounding regions.
IIGF and InfraAsia have signed memorandums of understanding (MoU) on collaboration covering market awareness, consultation and derisking facilities and the scaling up of government capacity, especially waste management projects, clean water supply and/or liquid waste management, urban infrastructure with low carbon concept and other sectors.
IIGF CEO M. Wahid Sutopo and InfraAsia executive director Lavan Thiru exchanged documents at the MoU ceremony, witnessed by Indonesian Ambassador to Singapore Suryo Pratomo and Singaporean Deputy Finance and National Development Minister Indranee Rajah on the first day of Asia Infrastructure Forum 2024 on June 4.
Sutopo said the collaboration between IIGF and InfraAsia aimed at supporting sustainable infrastructure development in Indonesia through international strategic partnerships to provide Indonesia with greater access to foreign investment, global expertise, financing and other support.
“With the collaboration, IIGF could strengthen its position as a public private partnership (PPP) hub in Indonesia, especially for investors and financiers in Singapore and the surrounding region, which is expected to increase sustainable national infrastructure development and garner more added value through investment and foreign financing,” said Sutopo.
Meanwhile, Thiru said that for InfraAsia, the MoU played a significant role, especially regarding the strategic partnership between Singapore and Indonesia, in accelerating the growth of infrastructure in Singapore and its surrounding regions under the PPP scheme. The cohesive and coordinated endeavours between the public and private sectors are of paramount importance in achieving the goal of sustainable infrastructure in Asia and InfraAsia is committed to encouraging more collaborative initiatives in the region. “We are highly enthusiastic about partnering with IIGF to progress sustainable infrastructure development in Indonesia,” Thiru said.
Apart from the collaboration initiative, as a program partner in Asia Infrastructure Forum 2024, IIGF also partook in the sharing session, especially the Ideation Roundtable session and project discussion, themed “Mobilizing Debt Capital Market for Sustainable Infrastructure in Emerging Asia”. In the session, Sutopo gave a keynote speech pertaining to the challenges and opportunities for infrastructure development in the ASEAN region, underlining the importance of private sector engagement in developing infrastructure and facilities that the Indonesian government provides to support private sector participation in making investments in developing infrastructure in various sectors under the PPP scheme.
He also revealed the role that IIGF played, especially with the mandate it had to support sustainable infrastructure development, especially when it came to bankability and credit enhancement through guarantees and other mandates, namely the provision of project development facility (PDF) that covered financial, technical and legal aspects, ranging from the preparatory phase, transaction phase and financial closing.
At the occasion, IIGF also shared its extensive experience and lessons learned from the implementation of diverse projects financed under the PPP scheme that it supports. “A good collaboration between the government and development agency in the project preparatory process, providing a derisking facility to ensure the bankability and commercial viability of the project, and also taking into account the environmental, social and governance [ESG] aspects in the projects are highly crucial to ensuring the sustainability of the infrastructure projects,” Sutopo explained.
Meanwhile, in the project discussion session themed “Urban Infrastructure: Balancing Growth & Sustainability”, IIGF business director Andre Permana revealed the role that the government, especially the Finance Ministry, played in supporting PPPs in Indonesia by providing fiscal instruments to accelerate infrastructure development, including the PDF, viability gap funding (VGF) and government guarantees.
According to him, the government guarantees, and PDF are provided through IIGF, the long-term financing through PT SMI and land fund through LMAN. Aside from that, support from various agencies in the PPPs in which IIGF serves as a secretariat and one of the members, play an important role in implementing the PPP scheme including planning, preparation, transaction and project management.
“When it comes to implementation, especially in the three infrastructure sectors, namely clean water supply, waste management and social infrastructure, eight projects financed under the PPP scheme are in progress. The projects located in West Java, Bandung City, Karawang, Denpasar, Balikpapan and Samarinda involve seven government contracting agencies,” Andre said.
“Preparation for the PPP scheme to develop sustainable infrastructure in the new capital of Nusantara is also underway. Each project has its own challenges and lessons learned and the picture is expected to generate private sector interest in investing in infrastructure projects under the PPP scheme,” Andre concluded.
This article is published in collaboration with Indonesia Infrastructure Guarantee Fund (IIGF)
