At a press conference here on Thursday, the President Director of the IIF, Sukatmo Padmosukarso, announced that the funds from the banks will be used to increase access to long-term financing of infrastructure development in Indonesia to boost economic growth and provide more employment.
"This is the first time that such a funding program with a long-term due time has been implemented in the midst of volatile world market," Sukatmo noted.
He added that the funds will be channeled to infrastructure, road development, toll road, telecommunication tower, hydro-power, coal-fired power plants, and airport and seaport projects.
Since its establishment in 2010, the IFC has channeled US$204 million and hopefully will increase it to US$377 at the end of 2014.
"The funding program is to support companies and also helps our funding basis," he said.
He said that 14 banks have participated in the funding program, including four from Japan, four from Korea, two from the Philippines, and others.
"The banks are coordinated by Standard Chartered and Deutsche Banks, each equally contributing around US$40 million, including Korean Exchange Bank, Sumitomo Mitsui Bank, and others," he noted.
Apart from banks, the funds have also poured in from IFC member countries, each contributing around US$52.5 million.
Sukatmo explained that the tenure will be five to 15 years, but he will take efforts to make their absorption as quickly as possible within one or one-and-a-half years so that the benefit of the funding "can be stretched more."
On the occasion, IFC country manager in Indonesia Sarvesh Suri hoped the funding could boost sustainable infrastructure development and green economic growth in the Asia-Pacific region.
"Infrastructure investment in Indonesia has reached only three percent of the GDP compared to India, where it has reached seven percent, and China 10 percent. Even in 2012, 30 percent of the population had no access to electricity. Inadequate infrastructure investment could reduce economic growth," he said.
The head of global financial institution of Standard Chartered Bank, Peter Heidinger, meanwhile hoped the funds could be used well involving the government or under a public-private cooperation scheme.(*)