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Jakarta Post

US, Indonesia sign deal to cooperate on infrastructure financing

  • Alya Nurbaiti

    The Jakarta Post

Jakarta   /   Sat, September 19, 2020   /   02:02 pm
US, Indonesia sign deal to cooperate on infrastructure financing Workers complete the Purwosari overpass project in Surakarta, Central Java, on June 16. (Antara/Mohammad Ayudha)

The United States Treasury Secretary Steven T. Mnuchin and Indonesian Finance Minister Sri Mulyani Indrawati have signed an agreement to bolster cooperation between the two countries on infrastructure development.

The Cooperation Framework to Strengthen Infrastructure Finance and Market Building, signed by the ministers remotely on Friday, is designed to support infrastructure development through market-oriented, private-sector investment.

Under the new framework, both countries will address regulatory barriers as well as market and legal barriers to private-sector investment by focusing on the development of financial instruments, project finance, the local debt market and capital markets.

Read also: Indonesia must derisk its infrastructure projects to attract foreign investors amid crisis: Infrastructure Asia

“Infrastructure development is critical to economic growth and long-term recovery from the effects of COVID-19. This framework supports economic growth and our shared goals to meet infrastructure needs,” said Mnuchin in a statement released by the US Embassy in Jakarta on Friday.

The working group under the agreement will hold its first meeting virtually on Sept. 22 and 23.

President Joko “Jokowi” Widodo has made the development of basic infrastructure like roads, airports, seaports and telecommunication one of his top priorities since 2014. The 2021 state budget allocates Rp 414 trillion (US$28.5 billion) for infrastructure development, marking a 47 percent increase from the 2020 budget. (aly)