"If Indonesia wants to become a developed county sooner, there should be creative and alternative financing for infrastructure development. This is what we want to facilitate through PINA," National Development Planning Minister/Head of National Development Planning Agency (Bappenas) Bambang Brodjonegoro said at the "PINA Day 2018" event in Jakarta on Thursday.
Brodjonegoro noted 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, which has been limited so far, to encourage development.
He remarked that the financing scheme, launched by the government since early 2017, has been used by other countries, such as China, Canada, and Australia, for infrastructure investment.
For that, Brodjonegoro expects the involvement of long-term funds in PINA, such as pension funds, life insurance, and haj funds, for the effective management and utilization of infrastructure financing.
Through 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 sectors.
"Pension fund should provide maximum benefit for participants, with maximum return on investment; but there is still a lot of pension fund investment in deposits, state debentures (SUN), and shares. Pension funds invested in the infrastructure is still small," Bambang revealed.
Various financial instruments to support the PINA scheme are also being prepared, such as Perpetual Bonds with a very long tenure, which is not only beneficial to support infrastructure development but also to increase interest in the capital market.
The number of planned infrastructure projects using the PINA scheme had reached 34 projects by December 2017, totaling Rp348.2 trillion, or US$25.8 billion, including 19 toll road projects, four aviation projects, 10 power generation and transmission projects, and one tourism project.
A number of PINA`s projects have reached financial close. They included 15 Waskita toll roads, worth Rp3.5 trillion; Kertajati International Airport, worth Rp932 billion; and Palapa Ring Fiber Optic Network, worth Rp174 billion.