JAKARTA (TheInsiderStories) – Finance minister, Sri Mulyani Indrawati, said the Indonesia Investment Authority (INA) will form a master, sub Fund and a joint venture company to carry out the the sovereign wealth fund’ strategic investment plans. Most of the funds, she explained, would invest in brown field projects that already have revenue streams such as toll roads, airports and ports.
As reported, the government has injected capital Rp15 trillion (US$1.07 billion) in the new state firm, which came from the state budget as regulated in Law Number 11 of 2020 concerning Job Creation. To increase the investment capacity of INA, the government is committed to lift up the capital of the agency up to Rp75 trillion gradually until end of this year.
Last week, the House of Representative has approved the supervisory board of INA. Chairwoman, Puan Maharani, announced the board member are Cyril Noerhadi, Yozua Makes, and Haryanto Sahari lead by Indrawati and state own enterprises minister, Erick Tohir.
“The three names were chosen by the President as the independent supervisory board of INA, ” she told the media last week.
Last year, President Joko Widodo, said that INA has potential to bring new investment around $20 billion to the country. The optimism come after government do their effort, approached the potential investors, such as United Arab Emirates, Japan, Britain, Germany, and United States.
While, senior minister, Luhut B. Pandjaitan, announced at the end of 2020, Japan Bank for International Cooperation (JBIC) committed to invest $4 billion for the establishment of INA. The commitment delivered after he met governor of JBIC, Maeda Tadashi, in Tokyo.
In November 2020, United States’ International Development Finance Corporation’ CEO, Adam Boehler and Panjaitan, has signed a letter of interest to invest $2 billion to the INA in Washington DC. While, Japan’ Softbank Corp., founder, Masayoshi Son, also has expressed his commitment to invest another $2 billion in the country.
Earlier, Panjaitan stated, the funds gathered in the new body will utilized for infrastructure projects, including for Indonesia’ new planned capital. He said, UAE participation at the Fund around $6.8 billion. He revealed, the scheme will serve as government-owned private equity that can be used as investment, especially for infrastructure development.
Panjaitan also stated, the SWF will lower the burden of the state budget and accelerate the implementation of projects, he noted. He pointed out that the infrastructure project financing scheme using SWF is not something new in the world.
INA is a state-owned institution or body that is tasked with managing public funds and placing them in various investment instruments. Sources of funds can come from foreign exchange reserves, trade surpluses, budget surpluses, as well as state revenues from natural resources
Indrawati added, based on the regulation, the state firm has obligations to provides dividend or profit to the government as much as 30 percent of the annual profit.
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