Public Funds Sign on for Indonesian Toll Roads, a Win for Indonesia Investment Authority

Posted on 05/21/2021

Sovereign wealth and pension fund capital are descending on Indonesian infrastructure. Indonesia Investment Authority (INA), Caisse de dépôt et placement du Québec (CDPQ), APG Asset Management (APG), and a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) signed a Memorandum of Understanding (MOU) to establish Indonesia’s first infrastructure-focused investment platform and INA’s first investment vehicle since its establishment. Indonesia is an increasingly attractive market for international investors, with a growing economy supported by positive demographic trends. Indonesia has a population of over 270 million people.

Through this MOU, INA plans to explore opportunities for joint investments in partnership with CDPQ, APG, and ADIA in Indonesian toll-road assets. The Investment Platform would be the consortium members’ primary vehicle for toll road investments in Indonesia. Over the next six months, the consortium has agreed to evaluate a set of initial toll road investment opportunities that would form the operating base of the Investment Platform. Once established, the Investment Platform will continuously look for investment opportunities in the toll road sector to add to its portfolio over time. Subject to availability of commercial assets, the Investment Platform is envisioned to have an investment capacity of up to approximately IDR 54 trillion or US$ 3.75 billion. Indonesia added 258 kilometers of toll roads in 2020, a number below the government’s target.

INA together with – CDPQ, APG, and ADIA – intends on generating optimal returns to investors while bringing economic benefits to Indonesia through alternative way of financing with the aim to further improve the toll road ecosystem. INA has a mission of also bringing economic benefit and job creation to Indonesia.

INA has been entrusted with IDR 15 trillion (approximately US$ 1 billion) to be followed by an additional injection of IDR 60 trillion (approximately US$ 4 billions) in 2021. The creation of INA’s first Investment Platform has been made possible by the strong support from Government of Indonesia that paved the way for the creation and promotion of INA to leading global investors.

Dr. Ridha D. M. Wirakusumah, Chief Executive Officer of INA, states: “We are truly delighted to be able to work with leading investors from around the world for our first ever Investment Platform. This demonstrates the confidence that global investors have in the Indonesian economic potentials even in this challenging economic environment. We believe this is a positive start for more collaborations between us and other investors in multiple sectors in Indonesia.”

“On behalf of INA, I would like to extend our most sincere gratitude to the consortium members – CDPQ, APG, and ADIA – who join hands with INA in our maiden investment platform, to the ministries for their strong support, and to the relevant State-Owned Enterprises for their cooperation”, DR. Wirakusumah added.

Keywords: Caisse de depot et placement du Quebec, Stichting Pensioenfonds ABP.

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