PT SMI's Role in Indonesia's Infrastructure Financing
PT SMI infrastructure financing explained: the history and role of Indonesia's state-owned financial institution in national economic recovery.
After the economic uncertainty caused by the Covid-19 pandemic, Indonesia is gradually rebuilding its national economy by accelerating sustainable infrastructure development. PT SMI (Sarana Multi Infrastruktur), a state-owned financial institution, has been given a mandate to serve as one of the key players in this effort. What exactly is its role?
The History of PT SMI
PT SMI's role in Indonesia's infrastructure development, and now in national economic recovery, is closely tied to its history. The company was first established in 2009 under the coordination of the Ministry of Finance, with a mandate to act as a catalyst for infrastructure development in the country.
Its first infrastructure financing was worth Rp 284 billion and went to the irrigation sector. In 2010, the government added Rp 1 trillion in capital and set up PT IIF, a subsidiary of the company formed as a joint venture.
In 2011, the Minister of Finance appointed PT SMI, as a state-owned financial institution, to facilitate the preparation of two showcase projects under the KPBU scheme (public-private partnerships): the Umbulan drinking water supply system and the Soekarno-Hatta Airport railway.
To establish itself as an infrastructure financing company, PT SMI launched a third business pillar, consulting services, in 2012. It complements the existing pillars of financing and project development. In 2013, the company worked with the Indonesia Stock Exchange to launch the SMinfra18 infrastructure index.
Nearly five years after its founding, PT Sarana Multi Infrastruktur won the "Finance Project of The Year" award for the Umbulan Project in 2014. In 2015, it officially received approval from the OJK (Indonesia's Financial Services Authority) to expand into additional financing sectors. In the years since, the company has continued to take an active part in investment financing schemes and sustainable development.
PT SMI's Role in Infrastructure Development
Its history makes clear how important PT SMI is, as a state-owned financial institution, in supporting infrastructure development in Indonesia. Most recently, PT SMI has helped carry out the national economic recovery program (PEN). Government Regulation (PP) No. 53/2000 has also expanded its mandate so it can run the program more effectively.
As a result, PT SMI can channel regional loan facilities (PENDA) under its PEN assignment. The company also helps state-owned enterprises recover from the impact of the Covid-19 pandemic. In carrying out this assignment, PT SMI provided a non-permanent government investment facility worth Rp 3.5 trillion to PT Kereta Api Indonesia, the state railway company.
PT SMI's nearly 13 years of operation are considered important in helping the government drive infrastructure development, particularly through financing. The Minister of Finance has said he hopes PT SMI will become an even more complete development institution in the future, in terms of financial instruments, knowledge and governance.
As a financial institution mandated to support infrastructure development and Indonesia's economic recovery, PT SMI plays a very important role, especially given the broad scope of its duties in keeping sustainable development projects moving. You can visit ptsmi.co.id for more details on its financing products and its role.
