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AKARTA: The government will establish a special financial agency to finance infrastructure projects in the country, the country’s top economic minister has said.

Coordinating Economic Minister Hatta Rajasa said in Jakarta on Friday that Bank Indonesia had in principle agreed with the plan. “The agency will operate as a non-bank financing company,” he added.

Hatta said Indonesia urgently needed such an institution to finance the infrastructure projects that would be the government’s development priorities in the coming years.

He said that the agency would be expected to be able to use short-term funds from overseas to finance infrastructure projects. According to Hatta, the flow of foreign funds would increase sharply next year, following the recent upgrade of Indonesia’s sovereign rating to investment grade by Fitch Ratings.

“We hope that with investment grade status, in addition to short-term funds, more foreign direct investment will also flow into Indonesia,” he added.