Jakarta, Indonesia, October 8, 2014—IFC,
a member of the World Bank Group, significantly ramped up its investments
in Indonesian companies to a record $804 million equivalent in Indonesian
rupiah and foreign currency during fiscal year 2014, up 84 percent from
a year earlier, and the figure is set to rise to more than $1 billion this
fiscal year. Nearly three quarters of IFC’s fiscal year 2014 (which ended
June 30) investments were in the infrastructure sector, and IFC supports
the incoming administration’s plan to build more infrastructure.
“IFC’s record investment and mobilization of both local and international
capital in line with client companies’ needs
underscore our strong commitment to supporting
the sustainable economic growth of Indonesia,” said Vivek Pathak, IFC’s
Director for East Asia and the Pacific. “Our top priorities this year
are to work with the private sector and the incoming government to enhance
Indonesia’s infrastructure sector and capital markets, which will boost
the long-term competitiveness of the country.”
Since IFC set up its Indonesia office 46 years ago, it has financed a total
of $6.2 billion worth of long-term investments, nearly a quarter of which
were committed in the last 15 months alone. Of the $1.5 billion over those
15 months, about $1.1 billion went to infrastructure and large-scale manufacturing
projects – two sectors where new investments are particularly needed.
Two major IFC investments in these sectors are the provision of a $509
million long-term loan to chemical manufacturing company PT Panca Amara
Utama (PAU) last month and a $280 million loan facility to Indonesian independent
power producer PT
Bajradaya Sentranusa (BDSN). The former deal is to fund PAU’s construction
of a greenfield ammonia plant in Central Sulawesi province to boost the
manufacturing sector and create jobs, while the latter is to support the
long-term operation of Asahan 1, a 180-megawatt hydroelectric power plant
in North Sumatra province to provide low-cost and renewable power.
As part of its efforts to deepen the development of Indonesia’s capital
markets, IFC partnered with PT Ciputra Residence, one of the country’s
leading residential property developers, in April to provide a 20 percent
credit guarantee for a 500-billion Indonesian rupiah (about $41 million)
domestic bond issue. The partial guarantee elevated the bond’s credit
rating, attracting a broader base of institutional investors.
“IFC believes the construction of large-scale infrastructure and the deepening
of capital markets development are critical to Indonesia’s future economic
growth,” said Sarvesh Suri, IFC Country Manager for Indonesia. “We are
committed to supporting the incoming government’s plans for the development
of infrastructure services to benefit Indonesia’s people.”
To promote transparency and accountability among Indonesia’s listed companies,
IFC supported the Financial Services Authority, or OJK, to develop and
launch a corporate-governance roadmap and manual in February. The roadmap
analyzes existing gaps in corporate-governance practices and recommends
changes to regulations and listing requirements to improve investor protection
and strengthen the business environment.
In fiscal year 2014, nearly three quarters of IFC’s investments in Indonesia,
or about $596 million, were in the infrastructure sector, $127 million
went to manufacturing, agribusiness and services companies, and $81 million
was in the financial markets sector.
IFC’s total investments in the East Asia Pacific region for fiscal year
2014 reached a record $4.2 billion (including $1.4 billion mobilized from
other investors), up 24 percent from fiscal year 2013.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org.