Tuesday, 22 December 2020 08:07

Jokowi: Sovereign Wealth Fund Can Make BUMN Infrastructure and Energy Healthy

The government will establish an Investment Management Institution (LPI) or Sovereign Wealth Fund (SWF). The formation of the LPI or SWF is intended as an alternative to financing development in Indonesia. President Joko Widodo (Jokowi) said that the launch of the SWF will be carried out in early 2021. It is hoped that the presence of this institution can support the economy of BUMN companies engaged in the infrastructure and energy sectors. "In early 2021, we will launch SWF, which is a new source of development financing, not loan-based but a form of equity or capital participation to make our economy healthy, healthier our SOEs in the infrastructure and energy sectors," he explained in his remarks to the Indonesian Economic Outlook, Tuesday (22 / 12/2020).

Jokowi stated that several countries had expressed their interest in injecting capital into SWF. The number is about 5 countries. "Currently, there are several countries that have expressed interest. Those from the United States, Japan, United Arab Emirates, Saudi Arabia and Canada," he said. Furthermore, Jokowi also invited all parties to be able to move quickly to strengthen cooperation and synergy in the current Covid-19 pandemic situation. "I am optimistic that we will rise. The economy will recover and return to normal," said Jokowi.

Previously, the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan stated that the Japan Bank for International Cooperation (JBIC) strongly supports the establishment of an Indonesian Sovereign Wealth Fund (SWF). This support was given when Coordinating Minister Luhut met with the Governor of JBIC Maeda Tadashi.

In fact, this support was provided through the investment commitment from JBIC to the Indonesian Sovereign Wealth Fund with a value of Rp 57 trillion. "JBIC is ready to support Indonesia's SWF funding of USD 4 billion (IDR 57 trillion), twice as much as what was conveyed by the US International Development Finance Corporation (DFC), a financing institution from the United States (US," Coordinating Minister Luhut was quoted as saying in the statement. written, Saturday (5/20/2020).

This commitment was conveyed by the Governor of JBIC Maeda Tadashi at a meeting in Tokyo on Friday. During the meeting, Luhut was accompanied by BUMN Minister Erick Thohir and Indonesian Ambassador to Japan Heri Akhmadi. Minister Erick added that the commitment conveyed by JBIC will be immediately followed up at the technical level. The hope is that JBIC's investment can begin to enter Indonesia in the first quarter of 2021. "The Government Regulation (PP) which regulates SWF Indonesia will be completed in mid-December and of course the PP will certainly accelerate the formation of an Indonesian endowment fund," said Erick.

Meanwhile, Ambassador Heri Akhmadi said that JBIC would become one of the financial institutions participating in the Indonesian SWF master fund called the Nusantara Investment Authority (NIA). "Support from JBIC and the Government of Japan will certainly strengthen the strategic cooperation between Indonesia and Japan, and attract more Japanese private sectors to invest in Indonesia," he added.

Source: https://www.liputan6.com/bisnis/read/4439435/jokowi-sovereign-wealth-fund-bisa-sehatkan-bumn-infrastruktur-dan-energi

 

 

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