The SRF, in a joint statement with the Indonesia Investment Authority, or INA, said the two sides have signed an “investment framework agreement” for potential deals in “various asset classes and fund of funds”. The SRF is an investment vehicle of the Chinese government.
The agreement targets all business sectors open to foreign investments in Southeast Asia’s largest economy, particularly “those that promote community development and economic connectivity” between the two countries.
“We believe that investment in Indonesia and the region has high potential, especially when conducting it together with INA,” said SRF president Wang Yanzhi.
Ridha Wirakusumah, chief executive officer of INA, said Indonesia shared a “strong commitment” with the SRF to promote bilateral economic ties. He added Indonesia will also continue to welcome joint investments with other countries.
Indonesia’s first wealth fund was established in February 2021, following the passage of a sweeping omnibus law the year before that sought to significantly reduce bureaucratic hurdles to investing in the country.
Unlike other sovereign wealth funds around the world, which also manage oil revenues, foreign exchange reserves or pensions, INA is seeking to attract foreign funds as co-investors mainly to focus on domestic infrastructure projects, and also in renewable energy, the health sector and the digital economy.
In April, INA signed its first concrete investment pact to provide around 39 trillion rupiah (US$2.6 billion) for toll roads on the islands of Java and Sumatra. The deals were signed by state-owned construction companies Hutama Karya and Waskita Karya.
Those came after it last year signed a memorandum of understanding with the Abu Dhabi Investment Authority, Dutch pension fund APG and Canadian pension fund CDPQ for its first investment vehicle – a subfund of up to US$3.7 billion focusing on Indonesian toll road assets.
INA has a target of amassing between US$15 billion and US$20 billion of assets under management over the next three years.