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3/28/13

Government to Issue Sukuk Projects Rp 1.5 Trillion in 2013

By: Dusep Malik

JAKARTA (IFT) - The government plans to issue sukuk project (project financing sukuk) to Rp 1.5 trillion in 2013 to finance the infrastructure projects. Dedy Supriyadi Priyatna, Infrastructure Deputy National Development Planning Ministry, said the sukuk proceeds to finance the construction of a double track Railway Project Cirebon-Kroya along 158 kilometers.


Construction of double track railway will be conducted in 2013-2014. The government will issue a sukuk infrastructure in 2013 and its use will be divided in two years. Issuance of sukuk is still awaiting finalization and approval of the Ministry of Finance. "We will also propose some infrastructure projects to be financed by sukuk after 2013," said Dedy Monday.

Determination of double track railway project Cirebon-Kroya example project finance sukuk in 2013 due to the cancellation of the plan to finance the project through foreign loan scheme provided by the Chinese government. Cancellation is due to the high cost (overestimate) needed. Project financing sukuk issuance of Government Regulation No. 56 Year 2011 on Project Financing Through State Sharia Securities Issuance.

Waluyanto, Director General of Debt Management at the Ministry of Finance, said the project financing sukuk issuance planned for next year confirmed only government projects undertaken ministries / agencies. These projects are large infrastructure projects that have gone through a feasibility study of good and true.

The government in 2013 will prioritize infrastructure sukuk in the domestic market and will possibly sell sukuk abroad, although it can strengthen reserves and make bond benchmarking Indonesia.

The government will also plan future project financing sukuk issuance on several projects in addition to infrastructure, such as housing projects and energy projects. Such projects could be funded through a sukuk with the terms included in one of the projects to be funded through the ministry / non-state-owned enterprises.

Grace reveals plan to issue Islamic securities countries basically done to support the implementation of national development goals. In addition, the publication does not have to look at the commercial aspect of the project. Projects funded must be really good, so there is no possibility of stopping in the middle of the street and its economic value is clear and does not give a bad perception of investors towards government projects.

Lukita Dinarsyah Tuwo, Vice Minister of National Development, said the project financing sukuk issuance mechanism made in the State Budget 2013. Issuance of sukuk is certainly not going to increase the debt burden of Indonesia because it is part of a plan sukuk are performed each year. This publication also considering the government's plans to reduce the ratio of Indonesia's debt to Gross Domestic Product to 22% in 2014.

David Sumual, an economist at PT Bank Central Asia Tbk (BBCA), said the project financing plan sukuk issuance in 2013 was the right decision, especially when it ranked Indonesia has entered the investment grade (investment grade). Publishing in the domestic market is expected to absorb a lot of funding from various institutions in the country who want to develop investment.

The amount is based on estimates of potential sukuk tenor is about 5-10 years, due to the construction of infrastructure projects take a long time. "The potential is great as the market took a match period, many institutions will find an attractive place for investment and long-term needs," he said. (*)
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