Jakarta, April 14, (Reuters) - Indonesia's sovereign wealth fund on Thursday agreed to invest in in coal-fired toll roads on the islands of Sumatra and Java worth more than 39 trillion rupiah ($2.72 billion), according to President Joko Widodo.
According to the finance minister, the Indonesia Investment Authority (INA) has agreed to invest in three sections of the Trans Sumatra toll road.
According to INA, it signed a confirmation on the completion of a transaction with Waskita Toll Road, a subsidiary of Waskita Karya, a state-owned construction company, for two portions of the Trans Java toll road.
The signings represent the country's first practical steps since founding a toll road fund last year of up to $3.75 billion, with Caisse de depot et placement du Quebec (CDPQ), APG Asset Management (APG), and a group of the Abu Dhabi Investment Authority (ADIA) as co-investors.
As the president is well-known, signings and INA's good governance will strengthen trust in infrastructure financing in Southeast Asia's largest economy, both domestic and international investors.
"I believe this kind of financing program we will continue to develop," he said. "God willing, bigger investors will come to Indonesia via the INA, not just (investing in) toll roads, but also huge projects that will impact the economy."
Other initiatives that INA is considering to invest in this year include sea ports, geothermal, and healthcare initiatives, according to INA's chief executive.
The wealth fund's assets under management equated to nearly $6 billion, but it wants to increase the amount to between $15 billion and $20 billion within three years, according to the CEO.
The INA is looking for foreign funds as co-investors in order to help the country's economic development, contrary to many other sovereign wealth funds.
($1 = 14,350.0000 rupiah)