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IFC Invests and Mobilizes Record $804 Million of Long-Term Capital in Indonesia to Support Infrastructure and Capital Market Development


In Jakarta, Indonesia:
Helen Lumban Gaol

Phone: +62 21 2994-8090

E-mail:
hlumbangaol@ifc.org


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.


About IFC

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.

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