Indonesia-UAE sovereign wealth fund for new capital development

Indonesia-UAE sovereign wealth fund for new capital development

Coordinating Minister of Maritime Affairs Luhut Binsar Pandjaitan. (ANTARA/M Agung Rajasa/suharto)

The scheme, if approved, will be a form of government-owned private equity
Jakarta (ANTARA) - The sovereign wealth fund (SWF) to shortly be established by Indonesia and the United Arab Emirates (UAE) can be utilized for infrastructure development, including those in Indonesia’s new planned capital, a senior minister stated.

The SWF scheme will serve as a government-owned private equity that can be used as investment, especially for infrastructure development, Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan remarked in Jakarta on Friday night.

"The scheme, if approved, will be a form of government-owned private equity. It could serve as national reserves. It can also be used to develop new capital," he stated.

The SWF will lower the burden of the state budget and accelerate the implementation of projects, he noted.

He affirmed that both nations will shortly finalize a plan for the SWF scheme.

A team of UAE officials will pay a visit to Indonesia next week to meet with their Indonesian counterparts to finalize the plan. On the similar lines, Indonesian Finance Minister Sri Mulyani will also fly to Abu Dhabi for finalization of the plan.

Pandjaitan pointed out that the infrastructure project financing scheme using SWF is not something new in the world. Several nations, such as Singapore, India, Egypt, Norway, and China, have adopted the concept.

The minister made assurance that the SWF, serving as a pool for financing infrastructure, including those in the new capital, will not encounter a problem.

"The SWF is also our money, (so it will not be a problem)," he stated.

He noted that not only the UAE but also the US International Development Finance Corporation (IDFC) is tapping the possibility of setting up SWF with Indonesia.

IDFC is tasked with offering foreign aid through the funding of private development projects.

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