In an unexpected move beyond core infrastructure, the Indonesia Investment Authority (INA) is set to strike a deal in digital infrastructure with plans for investment in tech unicorns.
Indonesia is gaining a reputation as one of the hottest prospects for growth in tech, with the pandemic putting boosters on the trend due to the rapid growth in e-commerce, on-line services and video conferencing. With this comes a growing need for infrastructure, including data centers and cloud services in the world’s fourth most populous nation. Alibaba, Amazon, Facebook, Google, Microsoft and Tencent are among those investing in data centers in Indonesia.
Although it has yet to complete a major investment deal, the INA successfully closed the first tranche in December for US$ 15.5 billion with commitments from the Indonesian government, the US International Development Finance Corporation, Japan Bank for International Cooperation, CDPQ and APG. The government has set a target for the INA to expand its assets to $20 billion by attracting co-investors.
In May, the INA secured an agreement for a US$3.75 billion infrastructure platform marks the first investment vehicle for the Indonesia Investment Authority (INA), backed by ADIA, CDPQ and APG. The consortium will invest in toll roads with assessments of opportunities over the next six months.
The INA is modelled on India's National Investment and Infrastructure Fund (NIIF), which is 49% owned by the Indian government and acts as a catalyst of foreign direct investment into the country's infrastructure. The move into the world of tech follows NIIF’s first foray into start-ups, announcing plans to acquire a US$150-200 million stake in children’s clothing e-commerce unicorn FirstCry. The move into venture capital is new for NIIF, but the fund is looking to expand its sectoral exposure in line with the mandate of its Strategic Fund.