EXPLORATORY STUDY OF THE POSITION OF INDONESIA'S SOVEREIGN WEALTH FUND (SWF) IN INFRASTRUCTURE FINANCING

• Main Author: Dhiya Nasywa, Afiyah
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/61908
• Institution: Institut Teknologi Bandung

The high need for infrastructure development in Indonesia is not accompanied by sufficient financing capacity. The existence of limitations in domestic financing makes Indonesia need to attract capital from abroad. However, existing institutions are not enough to attract foreign investors, so Indonesia formed its Sovereign Wealth Fund called Lembaga Pengelola Investasi (LPI) or Indonesia Investment Authority (INA) which is intended to finance Indonesia development which emphasize infrastructure development. This research aims to identify position of Indonesia’s SWF in infrastructure financing. This research is an exploratory research with data collection in the form of literature review and semi-structured interviews with snowballing techniques to 10 correspondents from INA, government, private, and academic background. This research is analyzed using qualitative descriptive methods. The results of the study show that LPI is focused on direct investment and forming joint ventures with other investors with equity and semi-equity instruments. The infrastructure assets financed are focused on brownfield assets and are carried out under an asset recycling scheme. This research is an exploratory research that provides an initial description of how the position of LPI in financing infrastructure development and requires further studies, namely research on risk mitigation of LPI as the executor of development financing, research on suitable sectors/projects offered to LPI, as well as research development when SWF is actively investing