Indonesia-based infrastructure development firm PT Sarana Multi Infrastruktur (SMI) is targeting to doube its infrastructure financing Rp22 trillion in 2016 from this year Rp12 trillion. Last year, the agency disbursed Rp5.58 trillion.
Until November SMI has disbursed infrastructure financing Rp10.3 trillion ($735.71 million) mostly transportation such as toll road, port, maritime, airport and energy sectors.
SMI has helped in financing of the Trans Sumatera Toll Road Projects, Umbulan Water Treatment, Riau Tenayan Power Plant Project, Cikopo – Palimanan Toll Road Project, and state owned airport operator PT Angkasa Pura II projects.
SMI will become the future Indonesia Development Bank (LPPI) starting 2017 after it gets approval from House of representative, to merge with the other state firm Perusahaan Investasi Pemerintah (PIP) in January.
Finance Ministry will terminate PIP and transfer the company’s assets with worth 18.36 trillion rupiah to SMI in June. After the merger SMI will have about 24 trillion rupiah in capital, including the government’s fund injection of 2 trillion rupiah.
According to Emma Sri Martini, chief executive for SMI said on Friday, that after the merger SMI will have the capability to finance projects with tenor of 25 years (from current capacity of 5 to 10 years).
A mismatch between banks’ funding terms and financing the projects has emerged as a problem in the country. Government expects SMI to help with the gap financing.
“After finance ministry released the new rule, we also have a capability to provide financing for regional government ,” Emma Sri Martini told DEALSTREETASIA.
Director for Project Development and Advisory Darwin Trisna Djajawinata added, three years ahead SMI will focus on providing finance to infrastructure projects in Central and East Indonesia.