RI remains second largest market in East Asia for IFC
The Jakarta Post, Jakarta
Indonesia has remained the second largest market in East Asia and the Pacific, after China, for three consecutive years for the International Finance Corporation (IFC), a private lending arm of the World Bank.
IFC's loans exposure for Indonesia in its fiscal year 2005, which ended in June, reached US$167 million, a jump of 21 percent from last year's $132 million, according to the body's financial statement.
From the $167 million, some $157 million was disbursed for equity and loans portfolio and $10 million for guarantees and risk management products for seven local firms.
In total, IFC had disbursed $494 million -- $344 million in loans, $111.8 million in equity and $37.4 million for guarantees and risk management products -- to 38 Indonesian companies over the past three years.
IFC country manager for Indonesia German Vegarra said IFC principal had given the green light to accelerate investments here, which is the eighth biggest IFC market worldwide, due to the satisfying performance.
"We have invested almost $500 million over the past three years and may exceed $1 billion in cumulative investments over the period 2002 to 2007," he said here on Thursday.
Vegarra said IFC's future key investment areas would focus on infrastructure, financial services, oil, gas, mining and small and medium enterprises (SMEs).
"We would like to see investments in toll roads and electricity plants. To double our investment growth in this country, we would also like to support investment in alternative energy," he said.
He added that his firm would set aside a large portion of income to support investment in alternative energy, such as geothermal and solar energy.
"As you know investment in this area is not economically viable because it is very expensive. So IFC will use some of its income to lower the cost of the capital or improve the tariff structure, so we can attract big players to come and invest in this area," he said, adding that about one fourth of the company's global profit would be allocated to support the development of alternative energy.
IFC's financial statement said its global net income reached $2.02 billion, while its operating income reached $1.95 billion.
Vegarra also said that IFC had been supporting five projects worth $210 million which were expected to be completed by the year end. It also expects more projects worth $250 million to be completed by June 2006.
The corporation's Program for Eastern Indonesia SME Assistance (IFC-Pensa) also committed $2 billion in loans during its two- year operation in the country to support the development of the country's SMEs. (006)