Pension funds to invest in infrastructure<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Members of the Association of Indonesian Pension Funds (ADPI) are
\nconsidering investing some of their funds worth Rp 68 trillion
\n(US$7.48 billion) for infrastructure projects this year,
\naccording to ADPI Chairman Satino.<\/p>\n
Satino said on Wednesday that the investment would be in the
\nform of capital injections for companies that would be actively
\ninvolved in such projects.<\/p>\n
\"We are considering that direction, but there must be a clear
\nset of investment instruments such as bonds and stocks,\" he said
\non Wednesday.<\/p>\n
Satino added that the investments would likely be allocated
\nfor the purchase of stocks and bonds of companies operating in
\nsectors related to infrastructure development, such as power,
\ntelecommunications, roads, and others.<\/p>\n
Indonesia will need up to $150 billion to finance its massive
\ninfrastructure projects over the next five years. In the first
\nround, the country has offered 91 projects worth $22.5 billion to
\ninvestors through the recent Infrastructure Summit.<\/p>\n
Coordinating Minister for the Economy Aburizal Bakrie said
\nthat a second round of offers worth $57.5 billion is scheduled
\nfor November.<\/p>\n
Chairman of the government's Infrastructure Financing Team,
\nRaden Pardede, has said that as a follow-up to the Summit five
\ninfrastructure projects worth $16.8 billion would be officially
\noffered through open tender in March 2005.<\/p>\n
\"Pension funds will help finance the infrastructure sector but
\nhow are we going to do this will depend on what (investment)
\ninstruments will be used,\" Satino said.<\/p>\n
\"And of course, we will choose the ones that offer the most
\nbenefits to us.\"<\/p>\n
According to the Institute for Development of Economy and
\nFinance (Indef) -- a Jakarta-based think-tank -- investing in the
\ninfrastructure sector has good prospects as Indonesia will be
\nallocating a lot of funds for such projects in the future.<\/p>\n
\"Pension funds can participate through a capital injection to
\nhelp finance infrastructure projects,\" Indef director Aviliani
\nsaid at a seminar called Indonesia Market Update 2005 and
\nOptimization of Pension Fund Portfolio Investments organized by
\nADPI and Batavia Prosperindo Aset Manajemen on Wednesday.<\/p>\n
However, the instruments for such investment should be set up
\nfirst, she said.<\/p>\n
\"The period of the investment must be more flexible,\" she
\nsaid. \"If investment recovery in infrastructure projects usually
\ntakes 15 years, it should now be shortened to five years.\"<\/p>\n
The total value of funds held by ADPI members reached Rp 57
\ntrillion as of the end of 2004, a 19 percent increase on 2003.
\nThe largest portion of pension fund investment was allocated to
\nstate bonds. (003)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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