AIIB Plans to Open Branch Office in Indonesia, Purbaya Promises Land and Building

JAKARTA - The government has expressed its readiness to support the plan to open an Asian Infrastructure Investment Bank (AIIB) branch office in Indonesia by providing state assets in the form of land and buildings that will be used as the institution's operational office.

Minister of Finance Purbaya Yudhi Sadewa said the government is currently identifying state-owned assets that are representative to support the presence of the AIIB in Jakarta.

According to him, the existence of the branch office is expected to make Indonesia the AIIB service center for the ASEAN region.

"We promise them that we will provide land and buildings for them, for them to use. I also have assets that are not used. It's okay for them to have a branch office here. So that ASEAN will be served from Jakarta, I want it that way," he said in a press conference, Friday, June 26.

He added that the government targets the AIIB branch office to start operating next year, so that various AIIB services for ASEAN countries are expected to be concentrated in Jakarta.

"We will provide, we are looking for which one is suitable. We will see which of our assets are suitable, which are representative enough to be used by the AIIB branch office. June will operate next year," he said.

In addition to the plan to open a branch office, Purbaya also emphasized the commitment of AIIB funding of US$ 17 billion is not government debt, but a project financing scheme or investment financing to support productive projects in Indonesia.

"AIIB gives 17 billion US dollars, not debt, it is actually a financing project. So, actually if I say this is like people investing here, we start investing in productive projects, but the interest is lower than ordinary investors, and the goods become ours," he said.

According to him, the facility can be used until 2029 and the disbursement can be carried out immediately if the government has prepared a project that meets the requirements.

"It is available to be taken until 2029. They said that if the project is there, they will immediately liquidate it," he said.

Regarding the use of funds, Purbaya emphasized that AIIB funding is not only intended for infrastructure projects, but also various other productive projects that provide economic benefits.

"(Not only infrastructure projects), other projects that are profitable. They have said there is a toll road in Sumatra. Later we will look for which projects we need money," he explained.

Purbaya assessed that the facilities from the AIIB can be an alternative source of financing for national development, including when the Nusantara Anagata Daya Investment Management Agency (Danantara) needs additional liquidity to finance investment projects.

"They want to give 17 billion US dollars. That's better. Later, if there are those who don't have money, they can also go through me, I invest through it. So our development is financed like investors come in but we have it in the end. If foreign investors come in, it's because they borrow money there. He pays interest and the goods belong to the investor. So it's profitable, not a loss," he said.