IFC to deploy up to $600m in Indonesia next year

"Our target is to have more cooperation with private businesses," said Sarvesh Suri, IFC's Indonesia country manager, The Jakarta Post reported. "The infrastructure sector is critical as it can help improve the livelihood of people in rural areas. That is one of our main focuses." Water, clean energy and oil and gas will be among the industries targeted, through a combination of loans and equity financing.

Suri added that IFC has provided financing to 5,000 small- and medium-sized enterprises (SMEs), noting that the SME sector creates 90% of the jobs in Indonesia. As part of efforts to facilitate lending to small business, the organization increased its equity holding in Bank Hana and converted its $15 million loan to BTPN into a 3% stake.

Perhaps IFC's most notable investment during the year ended June 2012 was a $25 million commitment for an 11% interest in Medco Power International (MPI), which provides natural gas and hydropower to residential customers. IFC participated in a $112 million buyout led by Saratoga Capital.

The funding is part of a $430 million debt-plus-equity package that will be used to expand MPI's footprint through acquisitions and green field projects.

According to state-owned utility Perusahaan Listrik Negara (PLN), Indonesia requires an additional 55,000 megawatts of power over the next decade, based on the expectation of 7% GDP growth. PLN will provide 57% of this additional capacity with IPPs responsible for the rest. IPPs currently account for 16% of Indonesia's current electricity capacity of 31,000 MW.

IFC also made a $25 million LP contribution to Indonesia-focused Falcon House Capital Management's debut fund.

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• Topics
• Southeast Asia
• Infrastructure
• Infrastructure
• Indonesia
• Southeast Asia
• IFC
• Infrastructure
• Saratoga Capital Group
• energy