(Repeat for additonal subscribers)
Aug 30 (The following statement was released by the rating agency)
Fitch Ratings has assigned PT Penjaminan Infrastruktur Indonesia (Persero) (Indonesia
Infrastructure Guarantee Fund (IIGF)) Long-Term Foreign and Local Currency ratings of 'BBB-' and
Short-Term Foreign Currency rating of 'F3'. The Outlook is Stable.
Key Rating Drivers
The ratings reflect Fitch's expectation of strong support from the Indonesian
government (BBB-/Stable), based on its 100% state ownership and IIGF's policy
role in infrastructure development in Indonesia.
IIGF was created to guarantee against political risk inherent in public-private
partnership (PPP) infrastructure projects. IIGF serves as the government's sole
representative for appraising infrastructure projects, structuring guarantees
and processing claims. The sectors eligible for guarantee are power, water,
roads and toll roads, transportation, sewerage and solid waste, irrigation,
telecommunications, and oil and gas.
As the national budget can only contribute less than half of required
development, the remaining portion is expected to come from private investment.
Fitch believes IIGF's guarantees can help to grow PPP infrastructure projects
throughout Indonesia, making the company strategically important in the region.
IIGF's paid-up capital was IDR4.5trn at end-2012 and Fitch expects it to grow to
IDR9trn by the end of the forecast period ending FY17. IIGF will leverage their
paid-up capital to a maximum of 2x equity.
Fitch expects IIGF's profitability to grow over the forecast period.
Nonetheless, profit maximisation is not the ultimate goal for this company due
to its primary policy role.
IIGF was established by the government of Indonesia in 2009 and is regulated and
supervised by the Ministry of Finance.
Downward rating pressure may arise from a downgrade in the sovereign's ratings,
dilution of IIGF's legal status or diminished government support. However, Fitch
views these as remote prospects in the near- to medium-term. IIGF expects total
paid-up capital to reach IDR9trn with capital injection from government over the