IDB looking to finance projects in West Java
The Islamic Development Bank (IDB) is looking to finance more private projects in West Java, but is demanding that businesspeople in the province come up with clear project proposals.
The IDB previously pledged US$5.2 billion worth of loans for private and public projects in Indonesia between 2015 and 2020.
Some $3.7 billion has been allocated to the private sector, IDB CEO of Islamic corporation for the development of the private sector (ICD) Khaled Mohammed Al-Aboodi said recently.
“We need to have a bankable project from the private sector. But unfortunately it has not been easy to find such projects in Indonesia,” Khaled said.
To help businesspeople come up with clear project proposals and forge links with foreign investors, the central government and West Java administration has held a forum attended by investors from the Middle East and Southeast Asia.
President Joko “Jokowi” Widodo’s special envoy for the Middle East and Islamic Cooperation Organization (IOC) countries, Alwi Shihab, underlined the importance of a clear and comprehensive project proposal to convince investors that a project is bankable.
“Sometimes the IDB is frustrated because the response from our businessmen is unsatisfactory,” Alwi said.
Nevertheless, the IDB has some pipeline projects in Sukabumi that involve the public and private sector in developing tourist potential along the south coast of West Java.
“They [IDB] have come and inspected the location and the West Java administration has facilitated their inquiries regarding land procurement,” Alwi said.
The province has boasted a three-hour business licensing facility for investors who wish to establish businesses in certain industrial zones.
West Java deputy governor Deddy Mizwar has presented several projects he deemed feasible for investors. This includes the Bandung Metropolitan light rapid transit (LRT), the Tan jung sari-Ker taj at iArja win an gun railway network, Cirebon international seaport and the Indonesian halal logistics hub.
Kertajati international airport and Nusawiru airport are also on the list of projects offered to the IDB.
Other projects on the list also include an industrial estate in Bekasi and Suryacipta City, clean water supplies in Cirebon, Legok Nangka solid waste treatment and disposal center, Cikembang mini hydro power plant and Ciletuh Geopark tourist site in Sukabumi.
The IDB’s $5.2 billion loan commitment is prioritized for several sectors, such as energy, transportation, urban development, higher education and skills, private sector development and Islamic financial expansion.
The IDB will work with other agencies, including the World Bank, the Asian Development Bank (ADB) and China-backed Asian Infrastructure Investment Bank (AIIB) to mobilize additional resources for financing priority projects in Indonesia.
The IDB can also lend directly to Indonesia’s state-owned enterprises with sovereign guarantees, the Saudi Arabia-based lender said.