IsDB Group Provides Over US$ 1 Billion of Development Support for Indonesia in 2016

The Islamic Development Bank (IsDB) Group concluded its operations in Indonesia for 2016 with over US$ 1 billion financing support, covering government projects in urban development, energy and education to development of the private sectors. The Group also supported initiatives in Islamic Finance and South-South Cooperation through Reverse Linkages, which is a South-South cooperation mechanism whereby member countries serve among themselves as the primary and forefront agents in the provision of expertise, knowledge, technology and solutions.

Dr. Bandar Al Hajjar, the IsDB Group President stated that 2016 was an exceptional year for IsDB Group and Indonesia. “In this regard, I am happy to announce that IsDB Group has approved US$ 1.045 billion in 2016 for the public and private sectors, making it the highest annual pledge for Indonesia since IsDB inception and representing 20% of the targeted envelope for Indonesia for the period 2016-2020. Furthermore, IsDB Group has also put a strong emphasis on capacity development and soft development activities, he added. The IsDB Group President explained further “following the inauguration of the IsDB Group country office in Jakarta, the IsDB Group launched the second Member Country Partnership Strategy for Indonesia 2016-2020 and held its 41st Annual Meeting in Jakarta in June 2016 which was very successful with over 5,000 participants and more than 30 knowledge events.”

On his part, the Resident Representative of the IsDB Group Indonesia, Mr Ibrahim Shoukry, deliberated further on the portfolio saying that “the IsDB approved funding of US$ 330 million to the National Slum Upgrading Project linked to the Government of Indonesia’s 100-0-100 program which is expected to benefit the population in over 4,900 kelurahans in 116 cities in Western Indonesia and parts of Kalimantan. Through our partnership with the State’s Electricity Company (PLN) and the allocated facility of US$ 330 million direct lending to manufacture 206 power transformers, the project is expected to improve the transmission infrastructure to facilitate an additional 10 thousand MW of energy supply in project areas.”

The Resident Representative further added that IsDB would continue to assist the tertiary education sector and recently approved the financing of four national universities for US$ 177 million in order to support the quality, relevance and accessibility to improve the enrollment rate and competitiveness of tens of thousands of students following project completion. “We are also undertaking significant efforts to deepen the Islamic Financial Services industry by providing technical assistance, capacity development, direct and indirect lending, equity investment, and advisory services with national players such as OJK, Ministry of Finance, Bappenas and Bank Indonesia. In 2016, the IsDB invested US$ 100 million in the government Sukuk program to reach a record Sukuk holding of over US$ 1 billion. The Islamic Research and Training Institute of the IsDB Group has conducted several training and knowledge workshops in Indonesia in 2016 in addition to launching Indonesia Islamic Finance Report,” he concluded.

With regard to South-South Cooperation, The IsDB constantly supported Indonesia’s prominent role in sharing its expertise with other developing countries. “IsDB, in the framework of Reverse Linkages, has been supporting one of the leading South-South Cooperation initiatives with Indonesia and Kyrgyz Republic in Artificial Insemination of Livestock, in which Indonesia transfers its knowledge and expertise in artificial insemination of cattle to Kyrgyz Republic.”

On the private sector initiatives, the International Islamic Trade Finance Corporation (ITFC), a member of the IsDB Group, had commenced an innovative US$ 100 million financing and trade development program to transform the Indonesia coffee supply chain over three years in collaboration with Indonesian Coffee Exporters and Industries Association (AICE), involving district traders, exporters, processors, roasters, etc. ITFC has also signed a Memorandum of Understanding with Indonesia Commodity & Derivatives Exchange (ICDX) to provide Shariah compliant pre export warehouse financing facility with the total amount of US$ 50.0 million.

Meanwhile, the Islamic Corporation for the Development of the Private sector (ICD) continued its support to the private sector by providing lines of financing to financial institutions, project and corporate finance to brown and greenfield projects in addition to advisory services while the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) has started to expand its insurance products for the Indonesian private sector.

The Islamic Development Bank Group (www.isdb.org) is an international financial institution with 57 member countries. It was founded in 1975 with the purpose of fostering the economic development and social progress of member countries and Muslim communities individually as well as jointly, in accordance with the principles of Shari’ah, i.e., Islamic Law. The IsDB Group comprise independent entities such as Islamic Corporation for the Development of Private Sector (ICD), International Islamic Trade Finance Corporation (ITFC), Islamic Corporation for the Insurance of Investment of Export Credit (ICIEC), and Islamic Research and Training Institute (IRTI), and Islamic Solidarity Fund for Development (ISFD) for poverty reduction.

The IsDB Group activities in Indonesia are aligned under the Member Country Partnership Strategy (MCPS) 2016-2020. The MCPS is a strategy document that guides the operation of the IsDB Group in its member countries over the medium term (3-5 years).

In December 2014, IsDB Group established its Country Gateway Office (CGO) in Indonesia (www.isdb-indonesia.org). The CGO facilitates and galvanizes the cooperation of IsDB Group with all the stakeholders in Indonesia including the Government, private sector, academia, civil society, and development partners.

35C, Office 8, LOT 28 SCBD
Jl. Jend. Sudirman Kav. 52/53
Senopati, Jakarta - Indonesia 12190
T: +62 21 2933 3468, F: +62 21 2933 3464,
E: cgoindonesia@isdb.org

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