(The following statement was released by the rating agency)
BARCELONA, August 27 (Fitch) Fitch Ratings has affirmed PT
Infrastruktur Indonesia's (Persero) Long-Term Foreign and Local
Default Ratings (IDR) at 'BBB-' and Short-Term Foreign Currency
IDR at 'F3'. The
Outlook is Stable.
The company is also known by its English name, Indonesia
Guarantee Fund (IIGF).
KEY RATING DRIVERS
The ratings reflect Fitch's expectation of extraordinary support
Indonesian government (BBB-/Stable) if needed, based on its 100%
and IIGF's important policy role in infrastructure development
IIGF was created to issue guarantees against political risk
public-private partnership (PPP) infrastructure projects. IIGF
serves as the
government's sole representative for appraising infrastructure
structuring guarantees and processing claims. The sectors
eligible for guarantee
are power, water, roads and toll roads, transportation, sewerage
waste, irrigation, telecommunications, and oil and gas. Fitch
guarantees can help to grow PPP infrastructure projects
making the company strategically important to the country.
Given the lengthy time it takes for a PPP project to be
executed, the scope of
IIGF operations so far has been limited. IIGF's main revenue
source at the
moment is the return on its investments from its sizeable
projects guarantee exposure to increase to IDR14trn (USD1.2bn)
by 2016 from no
guarantees issued at present.
Given the nature of its activities, IIGF's main risks are the
are off-balance sheet. Therefore all its liquidity is invested
short-term securities or bank deposits. If it requires cash-flow
meet any called guarantees, IIGF can obtain a short-term
facility from a bank as
well as approach the Ministry of Finance to inject additional
IIGF was established by the government of Indonesia in 2009 and
is regulated and
supervised by the Ministry of Finance.
An upgrade of Indonesia's sovereign rating, with continued
support, would trigger a rating upgrade as IIGF is credit-linked
A downgrade of Indonesia's sovereign rating or negative changes
to IIGF's status
following a dilution of its legal status or control by the
Ministry of Finance
could trigger a rating downgrade.
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Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234,
Additional information is available at www.fitchratings.com.
Applicable criteria, 'Tax-Supported Rating Criteria', dated 14
August 2012, and
'Rating of Public Sector Entities - Outside the United States',
dated 04 March
2014, are available on www.fitchratings.com.
Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
Rating of Public-Sector Entities - Outside the United States
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