Indonesia Infrastructure Finance (IIF), a specialist infrastructure lender backed by the Indonesian state and a roster of global development-finance institutions, is raising up to 500 billion rupiah, about 28 million US dollars, in the first tranche of a 6 trillion rupiah sustainable-bond program, channeling domestic savings into infrastructure screened for environmental and social standards.
The Sustainable Bonds III Phase I 2026 issue offers up to 500 billion rupiah across three tranches: one of 370 days, one of three years and one of five years, with coupons to be set before the offering. The bonds carry a AAA(idn) rating from Fitch Ratings Indonesia, the highest national grade, reflecting what the agency called a very strong capacity to meet long-term obligations. Bookbuilding runs from June 22 to 25, with listing on the Indonesia Stock Exchange targeted for July 9. Five firms are underwriting the deal on a full-commitment basis, namely Bahana Sekuritas, BRI Danareksa Sekuritas, CIMB Niaga Sekuritas, Indo Premier Sekuritas and Mandiri Sekuritas, with Bank CIMB Niaga acting as trustee.
IIF said the proceeds, after costs, will serve as working capital to finance commercially viable infrastructure projects that apply social and environmental standards in line with national and international norms. The company framed the issue as a way for the public to take part in funding sustainable infrastructure, and said later tranches of the 6 trillion rupiah program will be used the same way.
A development-finance pedigree
Established in 2010 at the initiative of Indonesia's finance ministry alongside multilateral partners, IIF is a private non-bank institution that finances and advises on commercially viable infrastructure, with the broader aim of drawing more private capital into the sector. Its shareholders are a distinctive mix of public and supranational institutions: state-owned PT Sarana Multi Infrastruktur with 30 percent, the Asian Development Bank with about 20 percent, the World Bank's IFC, Germany's DEG, which is owned by the state lender KfW, and Japan's Sumitomo Mitsui Banking Corporation.
That backing underpins its top-tier credit standing and its role in providing long-term funding, at tenors longer than the domestic market typically offers, for projects that struggle to find financing elsewhere. Since inception, IIF has financed more than 150 projects worth a combined 42.5 trillion rupiah across toll roads, renewable energy, water systems, telecommunications, airports and ports, including the Cikampek-Palimanan toll road and the Wayang Windu geothermal plant. Its bonds are held largely by domestic institutional investors such as pension funds and insurers.
Leaning into sustainable finance
IIF has increasingly positioned itself around sustainable finance, screening projects for environmental and social impact and issuing sustainability-themed bonds. In February, Canada's development finance institution, FinDev Canada, committed 30 million dollars to support its low-carbon lending, its first investment in Indonesia. The firm has also been moving into mini-hydro power and data-center financing, including a facility of up to 1 trillion rupiah for a data center in Cikarang, near Jakarta.
The push dovetails with Indonesia's energy transition, a complex undertaking for one of the world's largest coal exporters, which is targeting a larger share of renewables in its energy mix in the decades ahead.
The bond sale comes as Indonesia leans on private and blended finance to close a persistent infrastructure gap that the state budget can fund only in part. For domestic investors, IIF's AAA-rated paper offers a relatively safe, longer-dated instrument tied to the roads, power plants and digital infrastructure the country is racing to build.
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