Jakarta – US Secretary of the Treasury Janet Yellen and Indonesian Minister of Finance Sri Mulyani Indrawati signed the Rp10.2 trillion (US$698 million) Indonesia Infrastructure and Finance Compact. This is a five-year compact between the U.S. government's Millennium Challenge Corporation (MCC) and the Government of Indonesia
The US government contributes Rp9.5 trillion (US$649 million) while the Indonesian government accounts for Rp718 billion (US$49 million).
MCC CEO Alice Albright joined the signing ceremony at the International Monetary Fund in Washington DC on Thursday, April 13, with representatives from the US and Indonesian governments.
"This partnership represents the United States' and Indonesia's shared belief in democracy and innovation-driven economic growth," said Secretary Yellen, who is Vice Chair of MCC's Board of Directors.
According to Yellen, the deal is expected to Indonesia's Just Energy Transition Partnership, and the development of climate-resilient infrastructure that meets the standards under the Partnership for Global Infrastructure and Investment (PGII) – jointly announced by our presidents at the G20 Leaders' Summit.
The Indonesia Infrastructure and Finance Compact aims to improve access to finance for the country's transport and logistics infrastructure and MSMEs, especially those owned by women.
"Indonesia is taking crucial action to build a robust financial environment, promoting economic growth that benefits everyone. I am excited to see how our joint efforts will continue to strengthen economic security for current and future generations of Indonesians," Finance Minister Sri Mulyani said.
The Indonesia Infrastructure and Finance Compact consists of three projects. The first is 'The Advancing Transport and Logistics Accessibility (ATLAS) Project' – working with the provincial governments of South Sumatra, North Sulawesi, Riau, Riau Islands and Bali.
The second is 'The Access to Finance for women-owned/MSME Project', and the third is the 'Financial Markets Development (FMD) Project', which aims to provide technical assistance and blended finance grants to increase the participation of private sector or commercially oriented finance in infrastructure investments.