Indonesia and the UAE are exploring the feasibility of establishing a sovereign wealth fund (SWF) to act as an alternative financing vehicle for infrastructure investment.
According to a written statement from Indonesia’s coordinating minister of maritime affairs, Luhut Binsar Pandjaitan, he received a proposal from the UAE government for the establishment of a SWF.
“As a result of discussions with the Abu Dhabi Investment Authority (ADIA), the Minister of Energy, the CEO of Mubadala and several high-ranking officials in Abu Dhabi about a sovereign wealth fund, we will study this proposal soon and I hope this decision will not take long,” said the minister at a meeting in Abu Dhabi earlier this month.
The SWF will comprise a collection of investment funds from a number of countries, including the UAE, which will then be used to gradually increase investment in Indonesian infrastructure projects to as much as $10 billion.
“The UAE officials will visit Indonesia next month to meet officials of the Indonesian Ministry of Finance and Sarana Multi Infrastruktur to discuss the schemes, and the regulations and legislation needed for the establishment of the SWF,” said Pandjaitan. “They will also share their experiences with Indonesian officials on the formation of a similar fund with India, and Egypt,” he added.
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