The United Arab Emirates will invest $10bn in Indonesia’s new sovereign wealth fund to be spent on projects inside Southeast Asia’s biggest economy.
The UAE state news agency reported on Tuesday that the funds which marks the biggest foreign investment commitment for the Indonesia, will be used for infrastructure, tourism, agriculture and other ‘strategic sectors’,
Indonesia welcomed the announcement and said it should “help narrow the gap between the domestic funding capacity and the need for development programmes.
Indonesia’s Investment Authority, INA seeks foreign funds as co-investors to finance the country’s economic development and aid coronavirus pandemic recovery.
Authorities earlier said the INA had also received commitments of up to $10bn prior to its launch, from global companies and agencies, such as the United States International Development Finance Corporation and the Japan Bank for International Cooperation.
Fitch Ratings said on Monday that the launch of the INA is unlikely to reduce those companies’ debt levels in the short term, but Indonesia’s capacity to mobilise funds may be amplified if the fund is able to channel overseas capital into infrastructure.
