IIF: Government initiatives and ESG drive infrastructure investment

Jakarta (ANTARA) - The private non-bank financial institution PT Indonesia Infrastructure Finance (IIF) views government initiatives, market liquidity, and ESG (environmental, social, and governance) discipline as key factors in increasing infrastructure investment.

IIF President Director and CEO Rizki Pribadi Hasan, in a statement received in Jakarta on Monday, noted that Indonesia is well-positioned to accelerate infrastructure development through a coordinated ecosystem of specialised financial institutions.

As a non-bank financial institution established 16 years ago by the Indonesian Government together with four leading international institutions, Rizki explained that IIF plays the role of a catalyst in infrastructure development.

“Our mandate is to complement, not compete with, the banking industry and capital markets,” he said.

Together with several institutions, IIF has collectively financed more than 150 infrastructure projects across various sectors over the past 16 years.

In line with the importance of scale, the Government then established two sovereign wealth funds, with the latest also serving as a super holding for state-owned enterprises (SOEs) and an investor in government priority programmes. All these institutions collaborate closely.

Regarding market conditions, Rizki noted that domestic liquidity is adequate, with the banking loan-to-deposit ratio around 80 percent and the growing pension fund and insurance company bases seeking long-term assets.

Rizki also emphasised two non-negotiable factors: competitive pricing and ESG discipline.

“At IIF, we have spent the last five years systematically lowering the cost of funds and enforcing strict environmental and social standards in every project we finance,” Rizki concluded.