INA prioritises upskilling to boost strategic investments
The Indonesia Investment Authority (INA), Indonesia’s $10.5 billion sovereign wealth fund, has made upskilling a central focus of its co-investment strategy, aiming to build on the $25 billion of foreign financing it has already attracted.
“Through its multiple touch points with reputable institutions, INA is able to continue to learn and evolve based on its partners experience, their established governance frameworks and long-term investment approaches,” Stefanus Ade Hadiwidjaja, chief investment officer of INA, told AsianInvestor.
Since its founding in 2021, INA has deployed more than $4 billion across various strategic sectors.
“By collaborating with strategic partners, INA not only attracts additional capital but also gains access to expertise, best practices, and risk-sharing mechanisms that enhance the viability and growth of projects across Indonesia’s priority sectors,” Hadiwidjaja said.
Hadiwidjaja highlighted that the fund’s focus is on four key sectors identified as investment priorities for the coming years. The “smart capital” that INA seeks includes expertise, insights, and capabilities from investors familiar with these sectors.
“[We are seeking] deep knowledge of specific industries across our four key priority sectors – transport and logistics, green energy and transformation, digitalization and digital infrastructure, and healthcare," he said.
This is crucial for assessing investment potential and making strategic decisions in high-growth areas."
KEY SECTORS
The fund allocates across the four sectors based on identified opportunities rather than predetermined targets.
“Given we are still early days of our journey, rather than a predetermined target mix, each investment is evaluated individually to ensure it meets our mandate of impactful, strategic growth for Indonesia, as previously described,” Hadiwidjaja explained.
Recent joint ventures with sophisticated foreign institutional investors include a platform to invest in toll roads across Indonesia, co-funded with Dutch pension fund APG Asset Management (APG) and a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
The platform struck its latest deal in October, bringing total allocations to $1.4 billion, moving closer to the target of $2.75 billion.
Also read: INA intensifies call for co-investment partners
In October 2024, a joint venture between INA and Dubai-based port operator DP World began work on a new container terminal in East Java, an eastern province of the country.
The relationship dates back to 2021, when DP World pledged to invest up to $7.5 billion to enhance Indonesia’s maritime and port sector. The two formed a strategic alliance, launching a consortium to explore investments in Indonesia’s logistics infrastructure, including inland terminals, landside transport, and industrial zones.
“Smart capital also refers to investors with a strong understanding of investment strategies, including portfolio management, deal structuring, and risk mitigation. These partners [bring] the ability to navigate complex markets, adopt long-term perspectives, and adapt their approach to different asset classes and opportunities," he added.
BEST PRACTICES
“By combining industry expertise with investment acumen, INA ensures that its partnerships deliver both financial returns and meaningful contributions to Indonesia’s economic sustainable development,” he said.
Hadiwidjaja emphasised the role of improving INA’s governance through investment partnerships. INA has been a full member of the International Forum of Sovereign Wealth Funds (IFSWF) since 2022, and earned a score of 64% on the 2024 Global SWF Governance, Sustainability, and Resilience (GSR) Scoreboard, on a par with Singapore's sovereign wealth fund GIC.
“[IFSWF membership] provides access to global best practices in governance, investment, and risk management through the Santiago Principles. These principles emphasize transparency, accountability, and independence in investment decision-making, aligning INA with the highest international standards,” he noted.
Also read: INA turns up the tempo on private credit partnerships
In September 2023, INA entered into a deal with Chinese data centre developer GDS to build a series of data centres across Indonesia, although the size of the deal was not released.
Hadiwidjaja underscored the growing importance of Indonesia’s digital infrastructure sector to the country’s economy, noting that the fund is seeking additional large-scale co-investments of this type.
“Aware of the growing demand for connectivity, we are also exploring opportunities in fiber optics. With fixed data traffic expected to grow by 43% annually, these efforts not only aim to enhance connectivity but also to position Indonesia as a leader in digital innovation, creating opportunities for high-skill employment over the long term,” he explained.
In July 2022, INA signed an investment framework agreement with China’s Silk Road Fund (SRF), the $65 billion Chinese investment vehicle dedicated to Belt and Road projects. Under the agreement, SRF committed up to $2.9 billion in Indonesia.