The LPEI Increases Indonesia's Export Competitiveness With The Special Export Assignment Scheme

Photo: Doc. LPEI

JAKARTA - The government represented by the Ministry of Finance, Ministry of Trade, Ministry of Industry together with the Indonesian Export Financing Agency (LPEI) conducted socialization to the provincial Industry and Trade Ministry, associations, institutions as well as various business sectors and export-oriented business actors in Bandung, West Java, on November 25.

Special Export Assignments (PKE) are given by the government to LPEI to provide financing, guarantee, and/or insurance for transactions or projects that are commercially difficult to implement, but are deemed necessary by the government to support national export policies or programs.

To obtain financing using the PKE scheme, business actors must pay attention to several criteria that fall into the category of transactions/projects that are commercially difficult to implement or are deemed necessary by the government, namely:

1. Exporters find it difficult to obtain Export Financing from banks and/or financial institutions

2. Export Commodities are categorized as non-traditional

3. Export destination countries are categorized as non-traditional

4. Increasing the competitiveness and added value of Indonesian products

5. Supporting the growth of domestic industry and (6) Increasing and developing long-term export potential.

As one of the Special Mission Vehicles (SMV) of the Ministry of Finance, LPEI is a special institution established by the government with one of its activities providing financing to exporters/export-oriented businesses to increase the competitiveness of Indonesian products and services in the global market.

Managing Director II of the Indonesian Export Financing Agency, Maqin U. Norhadi separately said that LPEI support was important to increase export value both in terms of volume and destination. The expansion of export markets to non-traditional countries, such as Africa, the Middle East, and South Asia is very open.

"However, there are certain areas that have risks that are often avoided by industry players and national banks. The government ensures that it will provide support for export financing facilities to penetrate the market," he said in a written statement, Monday, December 6.

Some of Indonesia's strategic industrial business sectors that have used the PKE scheme include financing for the manufacture of PTDI aircraft exported to Senegal (in 2019) and Nepal (2021), financing for the export of passenger trains produced by PT INKA and exported to Bangladesh (2016, 2019 to 2020 ) and the construction project of 1.700 subsidized housing units (Lodgemont) in Baraki and 2.250 subsidized housing (Lodgemont) in Ain Defla and Khemis Miliana, Algeria which were built by WIKA in 2020.

"The role of the Government through the LPEI to provide export financing, especially to non-traditional countries, can stimulate strategic industries in carrying out a trade (exports) to these countries and also increase the competitiveness of Indonesian-made products and services in these destination countries. In addition, we also channeling PKE SMEs and PKE Trade Finance to encourage export-oriented SMEs and sectors," added Maqin U. Norhadi.