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Government to accelerate state capital injections for SOEs

Jakarta Post - September 1, 2020

Yunindita Prasidya, Jakarta – The Finance Ministry's State Assets Directorate General (DJKN) has said it will accelerate the disbursement of Rp 20.5 trillion (US$1.4 billion) in state capital injections (PMN) for five state-owned companies.

State-owned enterprises (SOEs) have an important role to play in supporting the country's economic recovery, Meirijal Nur, the DJKN's separated state assets director, said. The capital injection plan is a part of the government's national economic recovery program.

"We are trying to do it as fast as possible. It will be done by September at the latest", Meirijal said during a media briefing on Friday.

"To disburse the funds, we need to be quick, but that doesn't mean we can violate the rules of governance," he added, explaining that the capital injection process needed to comply with the relevant government regulations (PP) and that a regulation on the disbursement of the funds was still being processed.

The government plans to inject Rp 7.5 trillion into state-owned infrastructure company PT Hutama Karya, while state-owned financing firms PT Bahana Pembinaan Usaha Indonesia (Bahana) and PT Permodalan Nasional Madani will receive Rp 6 trillion and Rp 1.5 trillion, respectively.

State-owned PT Indonesia Tourism Development Corporation and state asset management company PT Perusahaan Pengelola Aset will receive Rp 500 billion and Rp 5 trillion, respectively, in state capital injections.

The capital injections are part of the Rp 695.2 trillion in stimulus provided by the government to strengthen Indonesia's healthcare system and cushion the pandemic's economic impacts.

Meirijal expressed optimism the funds disbursed to the SOEs would eventually reach the bottom economic layer of society.

Permodalan Nasional Madani, for instance, finances ultra-microenterprises through its Mekaar program that targets mostly women entrepreneurs.

Aside from backing several SOEs through direct support in the form of capital injections, the government will allocate funds to Bahana, PT Asuransi Kredit Indonesia (Askrindo), PT Jaminan Kredit Indonesia (Jamkrindo) to give loan guarantee to banks and financing companies that will then provide loans to cooperatives and small and medium enterprises (SMEs).

The government has also allocated funds to be channeled through the Finance Ministry's special mission vehicles (SMVs) to several chosen SOEs. National flag carrier PT Garuda Indonesia, railway operator PT Kereta Api Indonesia and steelmaker PT Krakatau Steel will receive loans of Rp 8.5 trillion, Rp 3.5 trillion and Rp 3 trillion, respectively, through the SMVs to support their operations.

The SMVs include infrastructure financing guarantee agency PT Penjaminan Infrastruktur Indonesia, infrastructure financing firm PT Sarana Multi Infrastruktur (SMI), secondary mortgage company PT Sarana Multigriya Finansial (SMF) and Indonesia Export Financing Agency.

Meanwhile, state-owned plantation company PT Perkebunan Nusantara and housing company PT Perumnas will receive Rp 4 trillion and Rp 650 billion, respectively, to manage their liquidity.

"We have been very selective. We don't give funds recklessly to SOEs," Finance Ministry State Assets Director General Isa Rachmatarwata said during the media briefing, adding that the agency designed support schemes based on its assessment of the SOEs' needs.

"We are giving to those that have been really impacted [by the pandemic] but on the other hand, still have the capacity to accelerate the economic recovery," Isa added.

Source: https://www.thejakartapost.com/news/2020/09/01/government-to-accelerate-state-capital-injections-for-soes.html