Bank Mandiri supports infrastructure financing: Spending Rp165.8 trillion
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily: Bank Mandiri Topang Pembiayaan Infrastruktur: Kucurkan Rp 165,8 Triliun
10 October 2018
By Nasori and Tri Murti
Benoa — PT Bank Mandiri Tbk supports infrastructure development in the country by disbursing funding of Rp165.8 trillion until last June. While Indonesia requires an investment of about US$1,231 billion for infrastructure projects until 2030 to support national economic growth.
Bank Mandiri President Director Kartika Wirjoatmodjo said at the moment Bank Mandiri still stands as a bank who provides the largest infrastructure credit in Indonesia.
“We now are the largest infrastructure financier. We have channelled infrastructure credit of Rp165 trillion. The limit is Rp250 trillion, so there’s still plenty of room to reach the limit until the end of the year,” said Kartika in Indonesia Investment Forum event in Benoa, Bali, Tuesday (9/10).
The funds from Bank Mandiri are allocated, among others, for road construction (Rp10.6 trillion), air transportation (Rp39.3 trillion), oil, gas, and renewable energy (Rp24.1 trillion), electricity (Rp36.8 trillion), telecommunications (Rp17.5 trillion), construction (Rp18.3 trillion), municipal housing and facilities (Rp9.5 trillion), and other projects (Rp9.6 trillion).
Besides supporting infrastructure development via credit provision, Mandiri also plays a role as investment banker for the government to woo foreign investors to make an investment in the country. Therefore, PT Bank Mandiri (Persero) Tbk will coordinate direct investment in 21 state-owned enterprises’ (SOE) projects worth Rp200 trillion. The investment cooperation deal was made in a series of 2018 Indonesia Investment Forum (IIF) event which was initiated by Bank Indonesia (BI), Financial Services Authority (OJK), the Finance Ministry, and SOE Ministry through Bank Mandiri.
Besides acting as a coordinator in the IIF event, Bank Mandiri is also committed to making the 2018 IMF-World Bank meeting in Nusa Dua, Bali successful. The Forum is vital to creating synergy among investors, stakeholders, and various investment opportunities that can support economic growth in Indonesia.
Meanwhile, AIA has strong commitment and is active in financing infrastructure in Asia Pacific. Excluding the total fixed income and equity investment, they have invested as much as US$20 billion in infrastructure related to electricity, transportation, and communication.
McKinsey aslo said that except China, the gap between spending and required funds for infrastructure financing in the world is getting larger. However, in China, the actual infrastructure spending between 2008 and 2013 reached 8.8% of the GDP. The gap between spending and estimated infrastructure investment required in China within the period of 2016 – 2030 indicates a surplus of 3.3%. Meanwhile in Indonesia, infrastructure spending is 3.1% of the GDP, so the gap between spending and required funds reaches 1.3% of the GDP in 2016 – 2030.
21 Projects
Meanwhile, Bank Indonesia’s (BI) Deputy Director in the Financial Market Development Department, Agustina Dharmayanti, revealed that the investment deal on 21 projects worth US$13.6 billion will be signed on the sideline of the 2018 IMF-WGB meeting. In a press briefing in Nusa Dua, Bali on Tuesday, Agustina said the signing of the investment deal for those projects is slated for Thursday (11/10).
Among investors that will be involved are Air France-KLM from France who joins hands with PT GMF AeroAsia Tbk for the development of aircraft machine maintenance technology.
There is also investment for development of tourism destinations in Mandalika, West Nusa Tenggara involving Indonesia Tourism Development Corporation (Persero) and Asian Infrastructure Investment Bank (AIIB). Canada-based company, Waterbury Farrel, will also partner up with PT Pindad to build an ammunition factory in Malang, East Java. PT ANTAM Tbk will also team up with Ocean Energy for a nickel project in East Halmahera.
“Later it will be informed comprehensively. There is also Aluminium Corporation of China Limited (Chalco) for a smelter-grade alumina refinery. There is also Inalum with MIT Energy Initiative,” said Agustina.
Among some other companies involved in the projects are AMW GmbH, PT Inka, PT Pertamina, PLN, PT Kereta Api Indonesia, Jasa Marga, PT SMI, and Maybank.
On the same occasion, BI Deputy Governor Dody Budi Waluyo explained realisation of investment to support infrastructure development in various sector will prove to the world that Indonesia keeps growing and making improvement.
“For Indonesia, addressing the current account deficit issue, it is hoped that better infrastructure will back export activities,” he said.
