Indonesia Needs USD 70 billion for Infrastructure Projects

TEMPO.CO, Jakarta - Wismana Adi Suryabrata, deputy for the infrastructure of the National Development Planning Agency (Bappenas), Indonesia requires USD 70 billion (IDR932 trillion) annually to support infrastructure development. Wismana explained that the government has to fill USD 50 billion infrastructure budget gap.

To meet the financial needs for infrastructure, according to Wismana, the government must seek alternative funding sources, which include cooperating with private firms. "The government would not be able to fill the gap," Wismana said on Tuesday, March 21, 2017,

According to Wismana, the development cost will increase to USD 74 billion if the cost of climate change is included in the calculation. "The government must optimize the role of private sector, particularly in capital investment," Wismana said.

The Asian Development Bank (ADB) vice president Bambang Susantono said that bank loans have yet to meet the need for infrastructure development in Asia. "The overall funds from banks would only make up 2.5 percent of financial needs for infrastructure," Bambang said.

The ADB is committed to disbursing USD 2 billion loans annually to Indonesia until 2019. The fund will finance energy projects, development of regions as well as dams and irrigation system, among others.

According to Bambang, the Asia-Pacific region needs USD 26 trillion investment for the next 15 years, or from 2016 to 2030. In other words, USD1.7 trillion is needed annually for infrastructure. "The fund is key to keep the economic growth momentum, eradicate poverty and achieving climate goals," Bambang said.

GHOIDA RAHMAH | FERY FIRMANSYAH