Press Releases 11 October 2022
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Ministry of Finance Collaborates with their SMV to Implement Sustainable Approach in Indonesia’s Infrastructure Sector

Washington DC, October 10th, 2022 – Minister of Finance, Sri Mulyani Indrawati became the main speaker in the Keynote Dialogue of the Special Event Toward G20 Summit with the theme “Infrastructure Development Through Innovation and Collaborative Financing: Toward Greater Inclusivity and Productivity”, which was held at The Convene, Washington DC, United States, on Monday and Tuesday, October 10th – 11th, 2022. The event was opened by Prof. Bambang Brodjonegoro, the Lead Co-Chairs of Think 20 (T20), who emphasized public-private partnership as a key factor to supporting the development of sustainable infrastructure.

"One particular issue that we need also to address is the financing scheme for infrastructure development, whereas investment and public-private partnership are among the keys to creating more sustainable and resilient infrastructure. Moreover, under PPP scheme, stakeholders specifically the government also need to strengthen capacity building and provide the right incentives either to the public or private sector to increase their sustainability,” said Prof. Bambang.

During the Sustainable Infrastructure Investment and Financing (SIIF) session, Minister of Finance, Sri Mulyani Indrawati conveyed the importance of the G20 Presidency to revamp sustainable infrastructure development during the post-pandemic era.

Finance Minister Sri Mulyani said, "When we are facing global problems like the pandemic and climate change, although you are still operating within your sovereignty, you also have to admit with a lot of humility that you cannot solve the problem by yourself even if you are the superpower in the world. So in this case, I think this kind of recognition helps us as the G20 Presidency to make the case that we need to continuously cooperate and collaborate in sustainable infrastructure development. We agreed on a sustainable finance mechanism that all countries need to contribute, and we are also using all institutions including the MDBs in order for us to be able to de-risk and mobilize more funds.”

The Indonesia G20 Presidency encourages more support for development funding, especially through boosting MDBs capacity, including the Capital Adequacy Framework (CAF) review. The CAF review aims to optimize MDB balance sheets to create bigger room for investment funds for member countries.

Also present on the agenda, Director General of Budget Financing and Risk Management, Ministry of Finance, Luky Alfirman as a panelist. In line with the Minister’s statement, Luky elaborated that discussions have been done with various potential investors, MDBs, and financiers with the hope that Indonesia can showcase one concrete action regarding their commitment to climate change in the G20 Leader’s Summit.

The Ministry of Finance of the Republic of Indonesia together with several of its Special Mission Vehicles namely Indonesia Infrastructure Guarantee Fund/IIGF, PT Sarana Multi Infrastruktur (Persero)/PT SMI, and PT Indonesia Infrastructure Finance/IIF each shared their contributions inthe session. This international event, which was initiated by Think20 (T20) Task Force 8 with P2EB UGM as the host institution, has become an opportunity for T20 to present research-based policy recommendations for G20 leaders regarding sustainable infrastructure development, with the main objective to provide alternative policies in overcoming various challenges and complexities of the world’s economy to recover in a sustainable and inclusive manner in the midst of the global crisis after a pandemic.

Minister of Finance Sri Mulyani Indrawati also added that within a sustainable development context, several initiatives have been done to close infrastructure gaps and support economic recovery such as in the area of renewable energy, climate change, digital infrastructure, and urban development projects. “The Ministry of Finance has formulated policies and implemented these initiatives with the relevant ministries and stakeholders”, she said.

Meanwhile, the President Director of IIGF, M. Wahid Sutopo at the Showcase session with the theme “PPP Projects & Energy Transition Mechanism (ETM) Initiative” conveyed the development and milestones of Indonesia's PPP as part of Indonesia's government effort to facilitate private investment for national infrastructure. Sutopo stated that IIGF's sovereign guarantee is structured and implemented in several PPP project showcases, and it aims to ensure project sustainability in terms of financing and outcome. IIGF also guarantees active monitoring which helps safeguard project sustainability and impact as people expected.

Sutopo added that IIGF is committed to support PPP projects with the concepts of digitization, efficiency, and renewable energy, which can be seen in its support for the Palapa Ring & Satellite Multifunction project to increase broadband access along with closing digital divide to remote and outlier islands such as Natuna and Morotai; and a small-scale PPP project in Madiun namely the Municipal Street Lighting project to deliver low energy street lighting which could promote the region's economic growth. Sutopo shared that these projects are proposed to become a legacy-case for the post T20 agenda.

On the same topic of discussion, PT SMI's Director of Risk Management Pradana Murti also conveyed the role of PT SMI as the ETM Country Platform Manager in Indonesia. Pradana stated that PT SMI is committed to Indonesia’s agenda in the area of climate change impact reduction through their role as ETM Country Platform Manager by ensuring that the transition will be done in a just and affordable manner, considering the social and economic impact of the transition.

In line with the above-mentioned statement, President Director & CEO of IIF Reynaldi Hermansjah explained how IIF is notably involved in numerous PPP projects in Indonesia. Reynaldi stated that IIF positions itself to actively develop Indonesia in a sustainable way. In addition to the way IIF finances projects, they have also tapped into several critical sectors such as healthcare, digital, telecommunication. With support from its multilateral shareholders, IIF is not only a business player, but also an advocate of sustainable development in Indonesia.



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