The two funds will be offered to investors in the form of private equity funds (RDPT) and asset-backed securities under collective investment contracts (KIK-EBA), said MMI director Endang Astharanti.

The subsidiary of state-owned Bank Mandiri — Indonesia’s largest lender in terms of asset — will channel the KIK-EBA funds to finance toll road projects built by state-owned toll road operator Jasa Marga.

Meanwhile, the RDPT funds will finance the operation of three mini hydro power plants (PLTM) in Cianjur, West Java, Purwokerto, Central Java and Lampung, as well as the construction of eight more power plants.

“The RDPT has been offered only to our accredited investors since July, and it has collected up to Rp 160 billion [US$12 million] in assets under management. By the end of the year, we want to achieve between Rp 350 billion and Rp 450 billion,” she said on Wednesday in Jakarta.

The three PLTMs, Endang explained, were fully operational with a maximum capacity of 7 kilowatts, while the other eight mini hydro projects were under construction and expected to start operations within two to three years.

The 11 plants, once operational, will have a capacity of 30- MW. The RDPT investors — required to invest a minimum Rp 5 billion — will own shares in the company operating the PLTMS and enjoy a 5 percent yield dividend in the first two years and 7.5 percent in the years after, as well as increased investment valuation when they sell the shares.

“Even though it is a long-term investment with a moderate return, it is still attractive for investors who want to have alternatives and want to enter the real sector without having to carry out comprehensive studies,” she said.

Acknowledging that extra effort was needed to educate investors about RDPT, Endang said the product had been well received owing to its steady net asset value. Existing investors have expressed interest in financing projects developed by state-owned electricity firm PLN.

As for the KIK EBA, MMI has leaped forward by securing a license from the Financial Services Authority (OJK) allowing the public to join in with a minimum investment of Rp 5 million. It will launch the product at the Indonesia Stock Exchange (IDX) by the end of August and is set to raise Rp 2 trillion to finance Jasa Marga’s toll road projects.

The OJK has been pushing capital market instruments such as infrastructure investment in the form of RDPT and KIK-EBA as a commitment to support the government’s infrastructure drive amid a rising budget deficit.

Earlier on July 20, the OJK issued a regulation on DINFRA, a mutual fund dedicated to infrastructure under collective investment contracts that must have at least 51 percent of their assets under management invested in infrastructure projects.

Several investment management firms have expressed interest in supporting the cause. BNP Paribas Investment Partners (BNP IP), for example, is assessing the possibility of issuing DINFRA. “We are reviewing the issuance of DINFRA because the regulation is still fairly new. We have to prioritize our investors’ protection,” said Vivian Secakusuma, BNPP IP president director.

Endang said MMI was also conducting preliminary studies and an investment awareness campaign on DINFRA, as well as the DIRE — an Indonesian version of real estate investment trustee (REIT) in the form of investment funds.

MMI saw its assets under management (AUM) grow 26.3 percent to Rp 48.1 trillion in July, from last December’s AUM of Rp 38 trillion. The company is expecting its AUM to reach Rp 50 trillion this year. (dis)

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