SWF will finance the construction of LRT and MRT in 5 cities in Indonesia

[Minister of Transportation Budi Karya Sumadi prepared plans to build MRT and LRT in five cities, namely Bali, Bandung, Surabaya, Medan and Makassar, through endowment funds. (Muchlis Jr – Presidential Secretariat Bureau).]

Minister of Transportation Budi Karya Sumadi is preparing plans to build mass rapid transit (MRT) and light rail transit (LRT) in five cities in Indonesia, namely Bali, Bandung, Surabaya, Medan and Makassar.

He said that the five projects would be funded through the Indonesian endowment fund scheme or Sovereign Wealth Fund (SWF). However, Budi did not specify a target for when the project would start construction.

“Infrastructure development remains a priority for Indonesia as per the long-term plan for 2020-2024,” he said at the Ministry of Transportation’s webinar entitled SWF Funding Opportunities to Accelerate Transportation Infrastructure Development in Indonesia, quoted on Friday (5/3).

He said that these mega projects would not be financed by the State Revenue and Expenditure Budget (APBN) or from BUMN due to increasingly limited financial capabilities.

Therefore, SWF is considered to be the right scheme to marry foreign investment interests with Indonesia’s infrastructure development needs.

In fact, he said that if there was no Indonesia Investment Authority (INA), a number of national strategic projects that had been planned until 2024 would be at risk of being delayed due to the pandemic.

This is the reason for the urgency in establishing the INA, which is headed by the Minister of Finance Sri Mulyani together with the Minister of BUMN Erick Thohir.

“With the current conditions, a number of national strategic projects are threatened with delays due to the pandemic, therefore this is the reason for the urgency of establishing the INA,” explained Budi.

[Original article SWF Akan Biayai Pembangunan LRT dan MRT 5 Kota di Indonesia by CNN Indonesia. Translation by Google Translate.]