UPDATE 1-Indonesia to set up $5 bln sovereign wealth fund soon, says finmin

(Adds finance minister’s comments)

JAKARTA, Oct 7 (Reuters) - Indonesia is preparing to set up a sovereign wealth fund with an initial equity of about $5 billion, which would be aimed to attract $15 billion in funds for investment, its finance minister said in a news conference on Wednesday.

The government would inject up to 30 trillion rupiah ($2.04 billion) in cash for its equity and add other assets, including stakes in state companies that would in total reach 75 trillion rupiah or $5 billion, Minister Sri Mulyani Indrawati said.

The government would leverage that to attract funds for investment totalling $15 bilion, she said.

“The model of this sovereign wealth fund is a combination of development fund and stabilisation fund and we would use international sovereign wealth fund models as the standards for best practice,” she said, adding that formally it would be called “Investment Authority Indonesia”.

The formation of the fund follows the passage of President Joko Widodo’s sweeping “Job Creation” bill into law this week. The law calls for a new institution with the authority to manage state investments.

Sri Mulyani said the president had requested for supporting regulations for this to be made ready within a week.

The fund would be managed by professionals in its executive board and government ministers would sit in the supervisory board, she said.

“We hope we can get reputable strategic partners so we can develop these assets to attract investment better,” she said.

The jobs law has drawn criticism for its provisions on labour reforms and changes to land and environmental rules, with thousands of workers and students protesting in multiple cities on Tuesday and Wednesday as part of a three-day national strike.

$1 = 14,690.0000 rupiah Reporting by Maikel Jefriando, Gayatri Suroyo and Bernadette Christina Munthe, editing by Louise Heavens