CNA – China’s Silk Road Fund (SRF) has signed a framework agreement to invest up to CNY20 billion (USD2.99 billion) in Indonesia’s sovereign wealth fund, the funds said yesterday.
The agreement allows for investment in all sectors open to foreigners in Indonesia, in particular those promoting economic connectivity between the countries, the Indonesia Investment Authority (INA) and the SRF said in a joint statement.
“We believe that investment in Indonesia and the region has high potential, especially when conducting it together with INA,” said the president of the SRF Yanzhi Wang.
Unlike many other sovereign wealth funds, which manage excess oil revenues or foreign exchange reserves, the INA’s business model seeks to attract foreign co-investors to help fund economic development.
The United Arab Emirates has pledged to invest USD10 billion with the INA, after the sovereign wealth fund’s launch in February 2021.
Indonesian authorities have said other global agencies such as the United States (US) International Development Finance Corporation and Japan Bank for International Cooperation had also expressed interest in becoming co-investors.
The INA has also formed a USD3.75 billion toll road fund with Canada’s Caisse de dépôt et placement du Québec (CDPQ), APG Asset Management (APG) and a unit of the Abu Dhabi Investment Authority (ADIA) last year.