Qatar Holding, the investment arm of Qatar's sovereign wealth fund, has set up a $1 billion (Dh3.67bn) Indonesian fund to invest in infrastructure and natural resources in Southeast Asia's biggest economy, officials said yesterday.
The new investment fund is a sign of increasing interest in Indonesia among Middle East and other international investors thanks to the country's abundant resources and desperate need for financing for infrastructure projects ranging from power plants to roads, railways, and bridges.
Qatar's existing interests in Indonesia include Qatar Telecommunication Co's 65 per cent stake in Indonesia's second-biggest telecom company, PT Indosat.
Gita Wirjawan, head of Indonesia's investment coordinating board, said that the local investment vehicle, PT Qatar Holding Indonesia, was set up a few days ago. "The main focus area will be on mineral resources and infrastructure projects," Wirjawan added.
Hilmi Gasim, an assistant to Alwi Shihab, the President Susilo Bambang Yudhoyono's special envoy for the Middle East, said that originally Qatar and Indonesia had planned to set up a jointly owned fund with Qatar holding an 85 per cent stake, but that Qatar eventually opted for a wholly owned fund.
Indonesia's huge coal and other mineral reserves have attracted keen interest from India and China, which want to secure steady supplies. But Indonesia has also been aggressively pitching to Middle Eastern investors for several big resources and infrastructure projects.
It has opened a new marketing office in Dubai and is slowly developing its Islamic financial markets to provide a wider array of sharia-compliant investments.
Last year, Indonesia's government attracted total investment of about $7.2bn from Middle East investors, including a $5.2bn investment in an integrated mineral-resources project in East Kalimantan with UAE's MEC Holdings.