Indonesia banker to helm country's new sovereign wealth fund

Jakarta

INDONESIAN President Joko Widodo on Tuesday named a senior banker, Ridha DM Wirakusumah, as the chief executive of the country's new sovereign wealth fund, which has a target of managing US$20 billion and financing infrastructure projects.

Mr Joko also named other professionals for posts on the board of directors of the fund, the Indonesia Investment Authority (INA).

The INA aims to attract foreign funds as co-investors, unlike sovereign wealth funds set up by other countries to manage oil revenue or foreign exchange reserves.

There has been scrutiny over the governance of INA particularly in the wake of a corruption scandal and massive losses involving neighbouring Malaysia's 1MDB fund.

"The INA is a professional institution, protected by the law and will use professional judgment in its work," Mr Joko said in broadcast remarks.

Finance Minister Sri Mulyani Indrawati, who heads INA's supervisory council, told a news conference that Mr Joko had said the fund must be managed to avoid the fate of 1MDB.

US-educated Mr Wirakusumah, until recently the chief executive of Bank Permata, has spent over 30 years in banking and investment, including with private equity group KKR & Co, AIG and Citibank.

"We will strictly and clearly carry out our duties with the highest integrity," Mr Wirakusumah said, adding that INA will be seeded with US$5 billion from the government and he expected about US$10 billion to US$15 billion more from investors. The fund has already earmarked some infrastructure projects to invest in and its first focus will be toll roads.

"There is some US$9.5 billion in our pipeline that we will look through to measure what will bring good returns for us," Mr Wirakusumah said.

Officials have previously said INA could also fund Mr Joko's project to move the capital of South-east Asia's largest economy to Borneo island from Jakarta.

The fund has faced scepticism because foreign co-investors will have to contribute a major share of investment, while Indonesia also has struggled to stamp out rampant graft and ensure legal certainty. REUTERS