President Joko Widodo meets with Saudi Arabian Prince Mohammed bin Salman on the sidelines of the G-20 Summit at Osaka, Japan - Photo: Secretary Cabinet

JAKARTA (TheInsiderStories) – Indonesian government actively invite global investors to invest in Indonesia. Lot of serials meeting arranged by President Joko Widodo’ minister to attrack more investors come to the country.

Yesterday, State Own ministry and the United Arab Emirates (UAE) began exploring opportunities for investment and cooperation in numbers of business development projects. This was marked by a meeting of many state-owned enterprises (SOEs) and Abu Dhabi Investment Authority (ADIA) in Jakarta on Wednesday (07/03).

The SOEs presented investment opportunities in numbers of business line development projects that they were working on. PT Perusahaan Listrik Negara and PT Angkasa Pura I explained the development of the Lombok Mandalika Project, which has great business potential with the development of environmentally friendly areas and renewable energy. Beaches that surround the area also attract Mandalika as a tourist destination in the future.

PT Pertamina also explained the potential for cooperation in Balikpapan’s refinery development master plan and the development of long-term LPG infrastructure and supply.

PT Waskita Karya Tbk (IDX: WSKT) explained the economic potential of the infrastructure projects they have been working on, including the Trans Java Toll and Tol Bekasi, Cawang, Kampung Melayu. Toll Road projects have a very important role in facilitating traffic flow, distribution of goods and services that connects Jakarta Province with its surroundings.

The first phase of projects has a 45-years of concession period in which Waskita Karya owns 99.7 percent of the shares and the remaining is expected to be completed by the end of 2019.

ADIA’ director, Hamad Al Dhaheri stated that he was very experienced in investing in the toll road business line, like WestConnex, the largest road infrastructure project currently underway in Australia.

He stressed that the pattern of developing infrastructure projects from green to be brownfields to later release its shares to the public is best practice in a number of countries.

Indonesia’ SOEs ministry is optimistic that the meeting has the potential to generate business development and investment values ​​that are promising for both parties given Indonesia’s relatively good bargaining position among developing market countries.

Cooperation with the UAE indicates that the need for infrastructure investment in Indonesia and Asia generally continues to increase. Based on data from the Asian Development Bank (ADB), a large amount of infrastructure investment for 25 countries in Asia, including Indonesia, reaches US$1.34 trillion a year so that the total investment needs can be projected to reach $20.1 trillion for the 2016-2030 period.

Of these estimates, Asia was able to invest $881 billion so that there was a difference in the need for infrastructure investment of $459 billion. While the need for investment in social infrastructure is almost equivalent to economic infrastructure, ADB estimates that the difference reaches $448 billion per year.

“For Indonesia, the infrastructure gap in the period 2005-2015 amounted to $1.5 trillion. For this reason, the government continues to encourage infrastructure investment, especially through alternative funding schemes such as government cooperation and business entities and non-government investment funding,” said national development acceleration minister Bambang Brodjonegoro in meeting with a number of companies in London, England, Tuesday (2/7).

Social infrastructure investment continues to be encouraged mainly to meet the target of meeting basic needs for the community in 2024, namely access to national clean water and sanitation by 100 percent, decreasing the level of defecation carelessly to zero percent, until national housing access is 52.78 percent.

Furthermore, transportation supporting infrastructure in 2024 is also targeted to experience a significant increase, including a total of 20 new airports, 1,350 kilometers of new railway lines, and construction of new roads of 3,000 kilometers, as well as the construction of new toll roads that are also 3,000 kilometers long.

In order to encourage economic growth, the government provides incentives by advocating and improving the investment climate in Indonesia through various policies and regulations. One of them is by giving a 20-year tax holiday for strategic projects, as well as freeing import duties for four years for production purposes such as domestic machinery, goods, and raw materials.

This was conveyed by Brodjonegoro at the Indonesia Infrastructure Investment Forum (IIIF) event in Paris, France, Thursday (04/7). He explained the national medium-term development plan 2020-2024 which provides a huge opportunity for foreign investors to enter and participate in building sustainable infrastructure in Indonesia.

The minister believes French investors also have a great opportunity to increase the scale of investment in Indonesia. Realization of investment from French companies during the period of January-December 2018 then around $50 million and ranked 28 compared to other countries.

Brodjonegoro explained that connectivity has become the main theme of infrastructure development in Indonesia in recent years, including the construction of roads and railways and the improvement of port and airport facilities. This focus on connectivity is seen as a direct prerequisite and strategic priority for Indonesia’s economic development, given the vast territory of Indonesia with a total of more than 17 thousand islands.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com