Indonesian President Joko Widodo yesterday named senior banker Ridha Wirakusumah as chief executive of the country's new sovereign wealth fund aimed at drawing foreign funds to finance local projects, particularly in infrastructure.
The US-educated Mr Ridha was chief executive of Bank Permata and had an illustrious career spanning over 30 years in Indonesian and international companies, including with private equity group KKR & Co, American International Group and Citibank.
The fund, known as the Indonesia Investment Authority (INA), will be a strategic partner for both local and foreign investors to help finance development programmes, particularly in the area of infrastructure, President Joko said in a broadcast.
"The Indonesia Investment Authority has a very strategic position in accelerating sustainable development, increasing and optimising the long-term value of state assets and providing alternative financing for sustainable national development," said Mr Joko.
The wealth fund has US$15 billion (S$19.8 billion) in assets and aims to grow this to as much as US$100 billion, according to Bloomberg.
Mr Joko, or Jokowi as he is known, noted that South-east Asia's largest economy trailed behind other countries - including Singapore, China and Norway - in setting up a sovereign wealth fund, but "it's never too late".
"I believe INA will be able to catch up and gain national and international trust," he added.
The President also announced the fund's board of directors, referring to them as "the nation's best sons and daughters who are experienced in the international professional arena".
Mr Arief Budiman, former chief financial officer of state energy firm Pertamina, has been named INA's deputy chief executive and Mr Stefanus Ade Hadiwidjaja, managing director of private equity firm Creador, as the chief investment officer. Other directors are Ms Marita Alisjahbana, risk manager at Citi Indonesia, and Mr Eddy Porwanto of private equity firm Northstar Pacific.
To allay fears of potential mismanagement, Mr Joko said the executives had been picked by a selection committee and professional headhunters.
He added: "It is guaranteed to be a professional institution, protected by law, and will use professional judgment in its work."
Mr Ridha said INA is looking for capital funds, not loan funds, and has earmarked infrastructure deals valued at "approximately US$9.5 billion in the pipeline", pending review on whether they would bring good returns to the fund and its co-investors.
He said: "We want to create an investment climate so that investors can enter Indonesia more comfortably and confidently, so that they can participate together... in Indonesia's development whose future is extraordinary, whether in terms of demographics, size, or business potential."
During a virtual press conference yesterday, Finance Minister Sri Mulyani Indrawati said Mr Joko had ordered that the wealth fund be well-managed and fraud-free.
"The President clearly said he did not want 1MDB to happen," she said, referring to the corruption scandal involving the 1Malaysia Development Bhd state fund.
INA would hit its capital target of 75 trillion rupiah (S$7.1 billion) by the end of the year, she added.
Dr Mulyani noted that several global investment and fund managers had expressed an interest in working together, citing Indonesia's large young population, relatively high growth, macroeconomic stability and President Joko's commitment to economic reforms.
She would not disclose the identity of the interested investors but said the key focus of financing for now would be in infrastructure, specifically toll roads.
The minister added: "With money coming from outside (the country), toll road development investment will be faster, better and more optimal."