Trenggalek Secures Rp 70 Billion from SMI to Transform Tourism into PAD Engine

The Trenggalek Regency Government has once again taken a tactical step to address fiscal space limitations through a regional loan scheme. In collaboration with PT Sarana Multi Infrastruktur (Persero) or PT SMI, the local government has secured a fresh infusion of funds amounting to Rp 70 billion. The primary focus of this financing is to accelerate regional connectivity and optimise the tourism sector, which is projected to become a new engine for Regional Original Revenue (PAD). Trenggalek’s initiative is a response to the challenges of infrastructure development, which often face constraints due to limited local budget capacity. Through the regional loan scheme, the central government via PT SMI provides a more flexible funding alternative compared to relying entirely on Special Allocation Funds (DAK). This financing is designed to deliver multiplier effects for the local economy. The tourism sector, which is Trenggalek’s flagship, receives special attention. The development of strategic roads in coastal areas and tourist destinations is expected to reduce logistics costs while increasing tourist visits. Based on economic impact analysis, the development of the tourism sector from this financing is projected to drive economic circulation of up to Rp 11.36 billion per year and increase PAD by 1.9% to 3.1% over a five-year period. Additionally, it will absorb 280 new workers in iconic areas such as Prigi Beach, Karanggongso, and Goa Lowo. As a Development Finance Institution (DFI), PT SMI acts as a development partner providing adaptive solutions for regions. “This financing is directed to strengthen connectivity and unlock Trenggalek’s local economic potential, particularly in the tourism sector which has high leverage for regional growth,” said Faaris. This synergy also offers a competitive interest burden of 6%. Notably, the collaboration includes simultaneous social and environmental support packages. PT SMI channels Corporate Social Responsibility (CSR) funds of Rp 490 million for the development of Dr. Soedomo Regional General Hospital and a grant of Rp 2 billion for preparing a regional waste management study.