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🇮🇩 Indonesia /Elections & Politics

AIIB plans representative office in Indonesia, minister says

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

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  • The Asian Infrastructure Investment Bank (AIIB) plans to establish a representative office in Indonesia, with the government pledging land and a building.
  • AIIB committed up to $17 billion in financing for Indonesian infrastructure and development projects, available through 2029.
  • The financing is structured as project-based investment with lower costs than private investors, and Indonesia also explored increasing its Panda Bond issuance in China.

Indonesia's Finance Minister Purbaya Yudhi Sadewa announced that the Asian Infrastructure Investment Bank (AIIB) intends to open a representative office in the country. This plan emerged from discussions during his official visit to China earlier in June.

AIIB also wants to open a branch office in Indonesia. I thought, if they're providing US$17 billion in financing, it's only fair that we support them with office space.

— Purbaya Yudhi SadewaIndonesia's Finance Minister, speaking at a media briefing in Jakarta.

The Indonesian government has committed to providing the necessary land and a building for the AIIB office as part of their cooperative efforts. This commitment was one of the key outcomes from Purbaya's June 16-19 visit to China. During the trip, AIIB also confirmed its commitment to provide up to $17 billion in financing for infrastructure and development projects within Indonesia.

"AIIB also wants to open a branch office in Indonesia. I thought, if they're providing US$17 billion in financing, it's only fair that we support them with office space," Purbaya stated during a media briefing in Jakarta on Friday, June 26. He added that the government would utilize unused state assets for the land and building.

We've promised to provide land and a building because the government has unused assets that can be utilized.

— Purbaya Yudhi SadewaIndonesia's Finance Minister, explaining the government's support for the AIIB office.

Purbaya clarified that the $17 billion commitment should be viewed as productive investment financing rather than conventional sovereign debt. The funds will be accessible until 2029, disbursed gradually as government-backed projects are prepared for implementation. He described it as "investment in Indonesia" with lower financing costs than private investors, while the assets remain under Indonesian ownership. The minister also engaged with Chinese regulators and investors to advance Indonesia's planned issuance of renminbi-denominated Panda Bonds, noting that demand has exceeded expectations, potentially leading to an increase above the initial $1 billion target.

It's more like investment in Indonesia. The funding is directed to productive projects, but with lower financing costs than those offered by private investors, while the assets remain ours. The facility will be available until 2029.

— Purbaya Yudhi SadewaIndonesia's Finance Minister, describing the nature of the AIIB financing.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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