Finally, I've decided to create my own blog. It seems like you would be more driven to put your thoughts in writing and avoid losing valuable information. What am I gonna write here? Well, as I said before, any thoughts that come out of my mind.
So lets start with today.. Champagne time!! Indonesia Infrastructure Finance is finally born, and I am part of the team that worked on its establishment (by the way, my team is Tusk Advisory Pte Ltd, which has been engaged by the founding shareholders of IIF to act as the Program Management Office and coordinate the establishment of IIF, and I acted as the Interim Director until we select the permanent management team).
I remember back in 2003, when I was involved in the team for the Asia Pacific Ministers' Forum on Infrastructure Development, I realized that infrastructure is quite unique and that to expedite its development, there needs to be a special financing scheme, and so I dreamed of an "Infrastructure Bank". Its an unbelievable feeling to be standing here today, and be a part of this. Although my dream was for Asian Infrastructure Bank (since the Forum was a regional forum), but IIF is indeed quite a realization of that dream.
IIF is capitalized with a commitment of $160 million equity from its founding shareholders (SMI - a Government SOE, IFC, ADB and DEG - a German Investment and Development Agency). It also has subordinated loan from ADB and World Bank of $100 million each. This is indeed not enough to meet all that Indonesia needs. But somebody has to make the first move. In parallel with the various government efforts to create a conducive investment climate for infrastructure, having IIF (and guarantee fund along with it), would catalyze the market-side to channel funds. The lack of familiarity for the financial sector in Indonesia to do so (including maturity mismatch in most cases, since most of the bank's source of funds are short term deposits), have been among the key reasons for the lack of investment in the sector.
That's all for now, I may write some more on this. Lets wish for the best for IIF, and for Indonesia's infrastructure. IIF is indeed a sign of Government's commitment, and the international support to this initiative. Champagne time!! (I dont really drink champagne, but whatever.. lets keep ourselves in high spirit)