Dicky Christanto, The Jakarta Post, Jakarta | Tue, 01/05/2010 10:33 PM
The government has set up a company to provide financial guarantees to so that firms can access credit to finance infrastructure projects, requiring Rp 1,923.7 trillion (US$207.76 billion) in the next five years.
The company, named PT. Penjaminan Infrastruktur Indonesia (PII), is to help private sector firms working on infrastructure projects backed by public private partnerships by giving guarantees to increase their creditworthiness, Arif Baharudin, a director at the Finance Ministry said in a statement.
The government has injected Rp 1 trillion from the 2009 budget to PII to provide initial capital, making the firm 100 percent state-owned.
“Additional capital is expected to be provided in the coming years,” Arif said.
He also said that the World Bank had pledged to disburse up to Rp 1.5 trillion in soft loans to support PII.
The government expects to be able in five years to spend Rp 768 trillion from state funds to finance upcoming infrastructure projects, while the rest is expected to come from private firms.
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