Tuesday, 10 March 2009

Government establishes infrastructure financing company

The government has established financing company PT Sarana Multi Infrastruktur (SMI) which will finance infrastructure projects, Asia Pulse reported on Friday.
SMI, which is expected to start operation in April, will provide financial support for projects especially ones failing to attract investors but considered having good prospects. SMI will start with an initial capital of Rp1 trillion ($90 million) to be provided by the government, Bisnis Indonesia reported.
Farid Arif Wibowo, an official of the Fiscal Policy Agency of the Finance Ministry, said the government will issue bonds to increase the capital of SMI.
In the first phase the bond will be valued at Rp3 trillion, Wibowo said, adding up to Rp20 trillion more funds will be raised later from the market.
He said SMI will serve as a holding company, adding that the financing agent will be the Indonesia Infrastructure Financing Facility (IIFF), to be established by the government and donor consortiums.The World Bank and Asian Development Bank have pledged a loan of Rp2 trillion for IIFF and Rp1 trillion in equity from other donor agencies, he said.

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