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The Asian Development Bank (ADB) has committed itself to
helping finance the projects to be put on the table during the
"Indonesia Infrastructure Conference and Exhibition 2006", saying it
stands ready to extend loans to interested private investors.
It will also provide assistance to the government in managing the
infrastructure fund that is to be set up by the government to ensure
the sustainable financing of future infrastructural development.
"We are looking for opportunities to lend to the private sector, or to
provide them with guarantees, to help them invest more in
infrastructure projects in Indonesia," visiting ADB vice president C.
Lawrence Greenwood Jr. said Tuesday.
However, he was unable to disclose how much the Manila-based
development bank would set aside for project loans, saying the exact
amount would depend on the results of the conference.
"But we anticipate that there will be a large number of private sector
investments because the government has been improving the framework for
attracting investment," he explained.
Greenwood also said that the ADB was prepared to set aside a quarter of
the US$4 billion in its latest commitment to Indonesia to support
infrastructural development.
The ADB revealed its commitment in its 2006-2009 Country Strategy and
Program (CSP) for Indonesia published Tuesday. The report also repeated
the government's estimate that infrastructural developing here would
need up to $65 billion in investment up to 2010 to create sufficient
growth to reduce unemployment.
The three-day investment forum, which starts Wednesday, is one of the
efforts being undertaken by the government to raise much-needed
development funds, with at least 10 commercially viable toll-road,
seaport, power-plant, municipal-water-supply and telecommunications
projects worth some $4.5 billion being put on the block.
The Public Works Ministry may put up another 22 projects worth up to
$30 billion, and further opportunities will be offered by other
ministries. The ADB is one of the main sponsors of the event.
Among the issues investors are likely to highlight during the forum are
the need for certainty over project land acquisition, risk-sharing
schemes, and other incentives. The planned Rp 4 trillion ($434 million)
infrastructure fund will include a "land fund" and a "guarantee fund"
to encourage investors to put their money into the projects.
The ADB was upbeat about better results from this year's event, with
the government already having improved the regulatory and policy
framework for investment in the infrastructure sector.
"The government has also set more realistic goals for the event now,
preparing 10 model projects," he said.
Greenwood also stressed the importance of the government integrating
the major infrastructure projects involving public-private partnerships
with less commercially viable ones in rural areas that the government
will most likely develop itself.
"It's got to be a mix," he said. "Farmers, for example, can really
improve their economic circumstances only if rural roads are improved,
and then they can further link up with the larger roads.".
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