Alternative Financing is Important for the Provision of Infrastructure Industry

INDUSTRY.co.id - Jakarta - National Development Planning Minister / Head of Bappenas Bambang Brodjonegoro said alternative funding schemes such as the Government's Non-Government Investment Financing (PINA) are essential to meet the infrastructure needs.

If you want to become a developed country faster, Indonesia would not want to have alternative financing and creative, for infrastructure financing, he said.

"This is what we want to facilitate through PINA," said Bambang in the event "PINA Day 2018" in Jakarta, Thursday (18/1/2018)

Bambang said that a financing scheme such as PINA is needed to reduce the backwardness of Indonesia in the provision of infrastructure and reduce the burden on the state budget that has been limited to encourage development.

He said the financing scheme launched by the government since early 2017 has been used by other countries such as China, Canada and Australia, using pension funds for infrastructure investment.

For that, Bambang expects the involvement of long-term funds in PINA such as pension funds, life insurance and haj funds in order to manage the funds can be more effective and utilized for infrastructure financing.

In the PINA scheme, the government has prepared various facilities for the project, including the guarantee of licensing process as well as the provision of land and the high return on investment to attract private sector interests.

"Pension fund should provide maximum benefit for participants with maximum investment returns, but there is still a lot of investment in pension funds in deposits, government bonds and shares, which enter the infrastructure is still small," said Bambang.

Various financial instruments to support the PINA scheme are also being prepared such as Perpetual Bonds with a very long tenor, which is not only beneficial to support infrastructure development, but also increase the passion in the capital market.

The number of planned infrastructure projects using the PINA scheme by December 2017 reached 34 projects totaling Rp348.2 trillion or 25.8 billion US dollars, including 19 toll road projects, four aviation projects, 10 power generation and transmission projects and one project tourism.

PINA's financial close projects include 15 Waskita toll roads worth Rp3.5 trillion, Kertajati International Airport worth Rp932 billion and Palapa Ring Fiber Optic Network - Central Package worth Rp174 billion. (Ant)