Lending Some Help
    Category: MP3EI Coverage By : Renjani Puspo Sari Read : 913 Date : Sunday, May 12, 2013 - 16:05:46

    Supri / Reuters

    Right after the government launched the Master Plan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) in May 2011, PT Bank Negara Indonesia (BNI) President Director Gatot Suwondo gathered his economist team to figure out how the bank might participate in the program. BNI declared itself as one of the first banks ready to finance MP3EI projects. To support the MP3EI, the bank placed special representatives in 15 regional offices in all six of the MP3EI economic corridors in May 2012.

    “Financing is not a problem. We even have financed projects that are compatible with the MP3EI even before it was launched. The success of the project now depends on how well prepared the government is,’’ says BNI Chief Economist Ryan Kiryanto. During 2012, BNI allocated funding for several projects worth Rp 182 trillion, up about 23% from the 2011's Rp 147 trillion, focused on defense, food, oil and gas, power plants, telecommunication, toll roads and transportation. To support these sectors, BNI cooperates with some prominent state-owned enterprises such as PT Angkasa Pura, PT Hutama Karya, PT Perhutani, PT Pertamina, PT Perusahaan Gas Negara, PT Perusahaan Listrik
    Negara, PT Pupuk Indonesia and PT Wijaya Karya. “Each financing is for a period of five to seven years, depending
    on the project,” Ryan explains.

    The reaction of BNI is laudable. One of the most important aspects of the MP3EI is the need for financing. The government has forecast that around three quarters of all the funds for the massive program should come from private sources, not the government. With the total estimated cost of the MP3EI running well over Rp 4.9 quadrillion or over $500 billion, that amounts to a funding need in the range of $300 billion. By any measure, a huge amount.

    However, many organizations are stepping forward with funding, notably other banks besides BNI. PT Bank Rakyat Indonesia (BRI), meanwhile, has channeled about Rp 7 trillion into infrastructure being build by the port authority PT Pelindo IV. In fact, BRI has financed infrastructure projects worth Rp 30 trillion last year and has budgeted Rp 25 trillion for this year. Bank Mandiri, meanwhile, is interested in railway projects—such as the one for Soekarno-Hatta Airport, a commuter train for the greater Jakarta