ADB approves 100 mln USD loan to boost private investments in Indonesia’s infrastructure sector

The Asian Development Bank (ADB) has approved 100 million U.S. dollars of loan for the Indonesian government to catalyze private sector's investments in infrastructure projects, ADB Country Director for Indonesia Winfried Wicklein said on Tuesday.

The loan was highly expected to help private investors to develop and finance projects of the much-needed infrastructure in Indonesia, he said.

"ADB's assistance will help close the infrastructure financing gap in Indonesia and raise the quality and standards of infrastructure projects," Wicklein said in a statement.

Under the Leveraging Private Infrastructure Investment Project, the ADB loan would be extended by Indonesian government to a private firm serving infrastructure financing, Indonesia Infrastructure Finance (IIF), through state-run firm of Sarana Multi Infrastruktur (SMI), the statement said.

SMI and IIF are important institutions in Indonesia's infrastructure financing landscape that provide project finance, advisory services, guarantees, and project development support to infrastructure projects.

With ADB's assistance, IIF will eventually lend at commercial terms to infrastructure projects adhering to IIF's and ADB's standards and guidelines.

The loan will support projects in health, renewable energy, telecommunication and transportation sectors, Wicklein said.

Infrastructure quality is essential to reach a more inclusive growth in Indonesia. It requires good infrastructure services to support a modern, competitive middle-income economy and provide basic services to the people.

Indonesia's infrastructure financing gap remains significant at present, with needed annual investment estimated to reach more than 70 billion dollars.

Indonesia has set priority to accelerate infrastructure projects in its medium-term development goals.

Source: China ASEAN Business Council