Japan Bank for International Cooperation (JBIC) has committed to invest $4 billion in Indonesia's sovereign wealth fund Nusantara Investment Authority (NIA), Indonesia’s government has said.
The Indonesian government hoped JBIC will make the investment available in the first quarter of 2021, the embassy said. NIA was formed with an initial capital of $5bn, is set to start operating in early 2021 and seeks to attract $116bn in investment for Indonesia's infrastructure projects. The 2020 Law on Job Creation mandated the government to establish the fund.
Indonesia's minister of maritime affairs and investment Luhut Padjaitan and state owned enterprises minister Erick Thohir met with Japanese entrepreneurs to explore cooperation with the SWF earlier this month. It is reported that Pandjaitan and Thohir will travel to Abu Dhabi and Saudi Arabia to seek more support for the fund.
Infrastructure expert John Yeap of Pinsent Masons, the firm behind Out-Law, said: "Indonesia has historically been an important jurisdiction for Japanese investors, with notable co-operation between the two governments on infrastructure development. JBIC’s commitment to invest in the NIA can be seen as a continuation of that co-operation. It is encouraging to see the positive response to the fundraising, and the focus will now be on the rules for the sovereign wealth fund as confidence in the fund will be very much dependent on how it will be managed."
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