Infrastructure SOE Ready to Provide Funding for Projects

The new state infrastructure financing firm PT Sarana Multi Infrastructure, or SMI, is now officially operational and looking for projects to take on to boost economic growth, a Ministry of Finance official said, after the firm’s commissioners and directors were appointed on Tuesday.
SMI will act as an operating holding company to provide long-term financing support, inject equity and guarantee infrastructure projects, Hadiyanto, director general for the State Treasury at the Ministry of Finance said. In the shadow of the financial crisis and tight liquidity, banks and financial institutions have been reluctant to lend for infrastructure.
“Infrastructure projects are expected to become a booster for economic growth,” Hadiyanto said. “In the current time, financing for this sector is far from adequate. The government established SMI to help accelerate infrastructure projects in partnerships with the private sector and multilateral institutions.”
But Emma Sri Martini, the new president director of SMI, did not reveal the projects the organization was eyeing, only saying that the firm, which was established in February, was reviewing potential projects from the State Ministry of National Development Planning, or Bappenas.
“But SMI will work closely with ministries, or institutions, local government, the National Land Agency, and state-owned or local government-owned companies to become our partners,” Emma, who previously worked at the state-owned Asset Management Company, or PT PPA, said.
SMI will create a joint venture, the Indonesian Infrastructure Finance Facility, or IIFF, with shareholders including the government, the Asian Development Bank and the World Bank.
The ministry’s Hadiyanto added that SMI would have an initial base capital of Rp 4 trillion ($368 million), comprising Rp 1 trillion from the state budget and as well as $100 million and $140 million from the World Bank and the Asian Development Bank respectively. Indonesia is still waiting for confirmed support from more international donors, such as from two German finance investment companies DEG and KfW Bankengruppe, as well as the Japan International Corporation Agency, or JICA.
SMI is a state-owned company, but unlike other state-owned enterprises, or SOEs, it reports directly to the finance minister, rather than the state-owned enterprises minister.
The government appointed Frans N. Sukardi, who previously worked for state-brokerage PT Danareksa Sekuritas, as director for business development on the SMI board. Farida Astuti, who previously worked for PPA, was appointed director of finance and risk management. The government appointed Ngalim Sawega, who is an official at the country’s Capital Market and Financial Supervisory Board, or Bapepam, as chief commissioner of its board, along with members Langgeng Subur and Wahyu Utomo, senior public servants working in finance and economic matters.