The United Arab Emirates (UAE) will invest USD 10 billion in Indonesia’s new sovereign wealth fund.
The United Arab Emirates’ investment in Indonesia’s sovereign wealth fund will be spent on projects inside Southeast Asia’s biggest economy, according to the UAE state news agency.
This is the first and biggest foreign investment commitment for the Indonesia Investment Authority (INA) since its February launch.
The UAE investment will be used for infrastructure projects, including roads and ports, and also tourism, agriculture and other “strategic sectors”, the state news agency WAM reported.
The fund will have USD 5 billion in cash and other assets. Unlike many other sovereign wealth funds, which manage excess oil revenues or foreign exchange reserves, the INA seeks foreign funds as co-investors to finance the country’s economic development and aid coronavirus pandemic recovery.
Indonesian officials welcomed the announcement and have said the INA will give opportunities for foreign investors with different types of risk profiles, while also helping state companies.
The INA had also received commitments of up to USD 10 billion prior to its launch, from global companies and agencies, such as the United States International Development Finance Corporation and the Japan Bank for International Cooperation, and some foreign pension funds.