"This Fund is aimed at giving local businessmen a greater chance to compete with foreign rivals in the global market. As such, they will become more reliable to face open market competition by improving the quality of their products and holding intellectual property rights both in Indonesia and Malaysia," PIP Chairman Soritaon Siregar said in a statement on Monday.
He said the institute was also aimed at strengthening relations between universities or research institutes in the two neighboring countries and producing more innovative products in the region.
Both agencies signed a memorandum of understanding on the formation of the institute in Kuala Lumpur on October 12, 2011 on the sidelines of a venture capital symposium themed risk taking - a paradigm shift.
PIP Chairman Soritaon Siregar and MTDC President Director Norhalim Yunus signed the MoU in the presence of Malaysian Prime Minister Datuk Seri Najib Tun Razak.
The institute expected to attract US$50 million in investment on the early days of its operation. Both PIP and MTDC have pledged to contribute US$25 million each to the institute.
It is expected 20 to 30 high technology companies in Indonesia will benefit from the institute.
The funding institute will channel funds in the form of soft loans and venture capital to small and medium enterprises. It will also finance new companies which produce sophisticated technology equipment and have the potential to give large benefit.
Among the benefits of the institute for companies are that they will be able to operate efficiently and produce high quality goods.
Soritaon said efficient production process would lead to clean environment. For example, production waste would be recycled to produce raw materials or new energy beneficial to the next production process.
He added the cooperation accorded with the finance minister`s decree number 177/KMK.01/2010 dated April 22, 2010 on government direct investment in the environmentally friendly investment field.(*)
Editor: Aditia Maruli Radja
Copyright © ANTARA 2011
