TEMPO.CO, Jakarta - Indonesia's Finance Minister Purbaya Yudhi Sadewa said the Asian Infrastructure Investment Bank (AIIB) plans to open a representative office in Indonesia, following discussions during his official visit to China earlier this month.
The Indonesian government has pledged to provide land and a building for the AIIB office as part of the cooperation. The commitment was among the outcomes of Purbaya's visit to China from June 16 to 19, during which AIIB also committed up to US$17 billion in financing for infrastructure and development projects in Indonesia.
"AIIB also wants to open a branch office in Indonesia. I thought, if they're providing US$17 billion in financing, it's only fair that we support them with office space," Purbaya said during a media briefing in Jakarta on Friday, June 26.
"We've promised to provide land and a building because the government has unused assets that can be utilized."
Purbaya stressed that the US$17 billion commitment should not be viewed as conventional sovereign debt. Instead, it consists of project financing for productive investments in Indonesia.
The financing will be available through 2029 and can be drawn gradually as government-backed projects become ready for implementation.
"It's more like investment in Indonesia," he said. "The funding is directed to productive projects, but with lower financing costs than those offered by private investors, while the assets remain ours. The facility will be available until 2029."
During his trip, Purbaya also held meetings with Chinese regulators and investors to advance Indonesia's planned issuance of Panda Bonds, renminbi-denominated bonds sold in China's domestic market.
According to the minister, demand from Chinese investors has exceeded the government's expectations, prompting Indonesia to consider increasing the planned issuance above its initial target of US$1 billion.
Read: Indonesia Delays Panda Bond Issuance Until End of July
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