|
|
Indonesia Infrastructure Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: August 2009 Product Code: R302-7634 Description President Susilo Bambang Yudhoyono - who was re-elected in July 2009 - has claimed thatinfrastructure projects will be among his major priorities over the next five years as the country seeks toboost growth and reduce poverty. BMI believes that as the global economy begins to recover in thesecond half of the year foreign investment funds will begin flowing into Indonesia once again, and thatthe government should take advantage of this opportunity to secure financing for key infrastructureprojects.The Yudhoyono government has already been active in this area, pledging to improve the country’s roads,airports, power plants, bridges and irrigation system. According to the National Development PlanningAgency (Bappenas) the government will finance at least 29% of the total IDR1,430trn (US$140bn) that isexpected to be spent on infrastructure between 2009 and 2014. The shortfall will be met by both local andforeign investors. As well as boosting economic growth, large-scale public works projects will alsoprovide employment. However, Indonesia has not been as severely impacted by the global financial crisisas other countries. Unemployment stands at 8.1%, which is down from 9.3% in 2008. Following the re-election of Yudhoyono, the biggest question is arguably whether Indonesia can join theBRIC (Brazil, Russia, India, China) league and make the group 'BRIIC'. Goldman Sachs in 2005identified Indonesia as one of the 'Next 11' big emerging markets, and in Indonesia itself a group ofbusiness leaders and politicians have initiated a 'Vision 2030' plan to raise GDP per capita to US$18,000,have 30 companies in the Fortune 500 list, and make Indonesia one of the five biggest economies in theworld by 2030. Reducing the country’s infrastructure deficit will be vital to achieving these ambitiousgoals. In general the climate for investments in Indonesia’s infrastructure sector appears to be improving,although the country still suffers from a number of structural problems that are restricting economicdevelopment, including power outages and transportation bottlenecks. BMI believes that an undevelopedfinancial sector is also a serious issue, as it has made it difficult to secure long-term financing. Despitethis, BMI forecasts that the construction sector will reach a value of US$71.66bn in 2013, up from afigure of US$37.35bn in 2008, driven by the fiscal stimulus package that will concentrate oninfrastructure works. In positive news, PT Perusahaan Listrik Negara (PLN), Indonesia's state-owned electricity company,has reportedly secured US$437.1mn in loans from a consortium of 23 regional banks. In addition, it hassigned a US$1.06bn loan agreement with the China Export Import Bank and the Bank of China. Bothagreements will go some way to help PLN implement its ambitious plans to develop Indonesia'selectricity generating capabilities. Under the 'fast-track' programme, PLN will develop 10,000MW ofcoal-fired generating capacity through the construction of 35 power plants, to come online by 2011. Thusfar, according to the Jakarta Globe, 33 power plants have been contracted; however, four have yet tosecure financing. Table of Contents
|
|
||||||||
MindBranch has been the leading provider of industry and investment research from more than 550 independent research firms since 1992. With over 90,000 market research reports, MindBranch is your trusted source of competitive business intelligence. |