TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Financial authority pushes insurance firms to invest in infrastructure

Anton Hermansyah (The Jakarta Post)
Jakarta
Thu, March 16, 2017

Share This Article

Change Size

Financial authority pushes insurance firms to invest in infrastructure Workers construct metal frames for the LRT project in Makasar subdistrict, East Jakarta, on Feb. 7. (JP/P.J.LEO)

T

he Financial Services Authority (OJK) is pushing insurance companies to invest in infrastructure projects being handled by several state-owned construction companies (SOEs).

"We have invited both insurers and construction SOEs. The latter have presented their projects to the insurers. Then they can make a consortium and invest directly or buy bonds," OJK commissioner for the non-banking financial industry Firdaus Djaelani said during a seminar in Jakarta on Thursday.

(Read also: Five SOE subsidiaries to hold IPO in 2017: OJK)

Firdaus said most of the insurers would prefer to buy bonds instead of investing directly because direct investment required more complicated calculations.

"If they want to invest directly they have to calculate the project yield and investment by themselves, but bonds are already analyzed and rated by independent rater," he said, adding that the insurance industry had around Rp 1 quadrillion in assets.

"We just want the industry to support infrastructure development. If an infrastructure project has a good internal rate of return (IRR) like 13 percent, why not?" he said. (bbn)

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.