Indonesia's $61 Billion Investment Authority: A Game Changer for Infrastructure Development

The Indonesian government has taken a significant step towards addressing the country's infrastructure development challenges by passing a law to create a $61 billion investment agency, known as the Indonesia Investment Authority (INA). This move is part of the government's broader strategy to attract foreign investment and stimulate economic growth. The newly established INA aims to provide a new avenue for investment, particularly in the form of equity or shares, rather than relying solely on state budgets and foreign debt.



INA's first target is to prioritize toll road projects due to their multiplier effect on economic growth and job creation. The Indonesian government plans to build 2,500 km of new toll roads in the 2019-2024 period, and INA's investment in this sector will support the development of this extensive network. Some specific toll road projects that INA may prioritize include those operated by companies like Hutama Karya, Waskita Karya, and Jasa Marga, such as the Medan - Kualanamu, Tebing Tinggi, and Kuala Tanjung - Tebing Tinggi - Parapat toll road sections. Additionally, Waskita Karya plans to divest its ownership in nine toll roads this year, which could present opportunities for INA to invest in these projects.

INA's diverse range of investors and partners, including development finance institutions, strategic investors, and co-investors from various countries, will play a crucial role in balancing the interests and expectations of these stakeholders while pursuing its investment objectives. To achieve this, INA can employ strategies such as clear communication and alignment of expectations, diversified portfolio and risk management, collaboration and co-investment, flexible investment structures, and performance monitoring and reporting.

Moreover, INA's focus on green energy and transformation will significantly contribute to Indonesia's sustainability goals and the global fight against climate change. By investing in renewable energy, green electric vehicle (EV) funds, and green infrastructure, INA is helping Indonesia reduce its dependence on fossil fuels and promote clean energy. This aligns with Indonesia's commitment to achieving net-zero carbon emissions by 2060 and contributes to the global fight against climate change by reducing greenhouse gas emissions.

In conclusion, the establishment of the Indonesia Investment Authority is a significant step towards addressing the challenges of infrastructure development and financing in Indonesia. By prioritizing toll road projects and focusing on green energy and transformation, INA is well-positioned to contribute to Indonesia's economic growth, sustainability, and the global fight against climate change. With its diverse range of investors and partners, INA is poised to balance the interests and expectations of these stakeholders while pursuing its investment objectives.