IDX Reveals Regional Governments' Enthusiasm for Exploring Regional Bond Issuance

The Indonesia Stock Exchange (IDX) has revealed the enthusiasm of a number of regional governments to explore the issuance of regional bonds through the Indonesian capital market, driven by limited regional income and expenditure budgets (APBD). Despite the high level of interest, IDX Director of Corporate Assessment Saidu Solihin stated that the exchange is still conducting studies on the potential of regional bond issuance. “There are many explorations, but this is a matter of political will,” Saidu told the media at the IDX Building in Jakarta on Thursday. He noted that several regionally-owned enterprises (BUMD) are interested in exploring options with the IDX as a step to meet their financing needs. Some regional governments are requiring BUMDs to seek new sources of funding or creative financing. “The exploration is for creative financing, meaning they are asked to look for creative alternatives for funding,” Saidu said. Specifically for Jakarta’s BUMDs, he confirmed that explorations are underway with three companies, including PT Bank Jakarta (Perseroda), PT Transportasi Jakarta (Perseroda), and PAM Jaya. The Jakarta Provincial Government has expressed its interest in issuing regional bonds this year. Jakarta Governor Pramono Anung stated that the potential bond issuance could absorb funds of up to Rp3.5 trillion. He explained that the regional bonds are intended to ease fiscal pressure on Jakarta after the central government cut the Revenue Sharing Fund and Regional Transfer Fund for the province by Rp15 trillion.