Indonesia Investment Authority (INA), the country’s new sovereign wealth fund, on Monday signed two agreements with the country’s biggest airport operator Angkasa Pura II (AP II), according to a statement.
Per the strategic partnership, a joint venture will be created between INA, AP II, and foreign investors to take over the operations of the Soekarno-Hatta airport and oversee the development of a new cargo village. The new development will be built over 90 hectares, three times bigger than the current cargo terminal size.
AP II will continue to own the Soekarno-Hatta airport and the new development.
Soekarno-Hatta is the biggest, busiest airport in Indonesia with over 850,000 aircraft movements recorded before the pandemic-induced travel curbs. In 2020, the airport recorded only half that number due to mobility restrictions across jurisdictions to contain coronavirus pandemic.
Ridha Wirakusumah, the fund’s chief executive, said the strategic cooperation brings “world-class management and practice” for airport and cargo management to Soekarno-Hatta airport.
The upcoming cargo village at Soekarno-Hatta airport will have a capacity of 1.5 million to 2.2 million tonnes of cargo per year, up from the current 700,000 tonnes a year.
INA has $5 billion of assets under management, seeded by the Indonesian government, according to its website. INA aims to grow its assets to $20 billion by attracting co-investors.
The sovereign wealth fund has yet to reveal its first major investment but it has formed a $3.75 billion toll road fund with Caisse de dépôt et placement du Québec (CDPQ), APG Asset Management (APG) and the Abu Dhabi Investment Authority (ADIA) in May.