Indonesia Wealth Fund May Miss Jokowi’s $200 Billion Target

(Bloomberg) -- Indonesia's wealth fund may not reach its $200 billion goal in the time frame set out by the country's president, as it aims to ensure sufficient returns for the state before making investments, according to its chief executive officer.

“The timing will probably be a bit stretched,” Ridha Wirakusumah said in an interview with Bloomberg Television's Haslinda Amin on Wednesday. “It also depends if we will be getting in more injections. But the fundamentals are set and the system is ready to go.”

President Joko Widodo set a target for the fund last year to reach $200 billion within two to three years -- around April 2024. The fund, known as INA, was established in 2021 with about $15 billion in assets. It was reported to have raised over $25 billion in investments as of March, with contributions from pension fund Caisse de dépôt et placement du Québec and the Abu Dhabi Investment Authority, among others

INA is part Widodo's strategy to lure more foreign funding to help fulfill his platform of developing much-needed infrastructure in Southeast Asia's largest economy. Potential investment returns would also augment state coffers after the heavy stimulus spending during the pandemic.

However, bulk of INA's assets so far remain idle as the board continues to hunt for prudent investment opportunities, amid investor concern over regulatory uncertainty in Indonesia and the corruption scandals that plagued 1MDB in neighboring Malaysia.

“We are on our way, but we will make sure we don't invest haphazardly,” Wirakusumah said.

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Among the fund's investments so far include an $800 million stake in Indonesia's largest telecommunication towers company, as well as a $2.7 billion deal with state builders covering about 20% of the nation's toll roads.

Going forward, INA is interested in the areas of digital technology, health care and energy, Wirakusumah said. The fund is keen to invest in projects that could replace coal power plants and develop renewables, as well as the booming electric vehicle sector “if the risk-reward is interesting.”