Indonesia must derisk its infrastructure projects to attract foreign investors amid crisis: Infrastructure Asia

Spread the love, The Indonesian government should focus on reducing the risks associated with infrastructure projects and prioritize.

The issue is how to refocus on opportunities and make them attractive to the international private sector so investors come in.

He added that a well-established consortium of investors preferred low-risk infrastructure projects over highly profitable ones.

“From my experiences working on projects outside Asia, projects that have an internal rate of return [IRR] slightly below the profitable level of 20 percent can still get a very credible consortium both from the equity and debt side.

Bappenas has estimated that the country will need US$429.7 billion in infrastructure investment. 

“If the government makes the right effort in these refocused sectors it will generate economic growth,” he said.

During his annual address to the House of Representatives on Aug. 14, President Joko “Jokowi” Widodo vowed to allocate Rp 414 trillion ($27.7 billion) on the 2021.