Jakarta (ANTARA) – Indonesia requires funds of some Rp6,500 trillion to build infrastructure until 2024, according to the Finance Ministry’s Director General of Financing and Risk Management Luky Alfirman.
The State Revenue and Expenditure Budget (APBN) could only meet 42 percent of the total funding, while the rest would come from State-Owned Enterprises (BUMN) and the private sector, Alfirman noted here on Friday.
“Therefore, financing is one way to reduce these costs. How we can design financing in such a way,” Alfirman stated during the 23rd T20 Edition of the Infrastructure Roundtable (IIR) Seminar on Friday.
Initiated by G20 in 2012, the Think20 (T20) engagement group is independent from national governments and includes prestigious think tanks and academia from the international community.
Alfirman said that the current government continues to invite financing from the private sector. This is in line with the discussion during Indonesia’s G20 Presidency, specifically increasing private sector participation, as the government cannot bear all development costs alone.
Related news: Jokowi inspects Nias infra development for opening up isolated regions
Investing in infrastructure is a long-term endeavor, for which there must be certainty in the projects being invested.
Hence, the Finance Ministry continues to provide certainty by managing existing risks, so that investors, especially domestic ones, are interested in investing their capital in an infrastructure project.
“We design this risk in such a way to minimize it because it is associated with the price we have to pay later,” he remarked.
Prospective investors usually tend to look at the political conditions and Indonesia’s economic prospects before deciding to invest in an infrastructure project in the country, he added.
Thus, he said, the stability of political conditions and improvement of the domestic economy are crucial in order to attract foreign investment.
Related news: Widodo reviews road infrastructure on Nias Island