The Oxford Business Group reports that in early October officials unveiled 79 infrastructure projects worth some $42 billion as part of the Indonesia Infrastructure Investment Forum - staged on the sidelines of the annual meeting between the IMF and World Bank, which was held this year in Bali.
The projects, which will be undertaken in partnership with state-owned enterprises (SOEs), cover a number of sectors, including transport, energy and industry.
In addition to unveiling the new developments, the government used the forum to encourage SOEs to make greater use of equity-based finance to fund infrastructure projects.
"Looking ahead, we will also encourage direct investment, strategic partnership and innovative long-term project financing," SOE Minister Rini Soemarno told delegates.
The approach appears to have had an effect. During the forum SOEs signed $13 billion in deals, mainly with overseas partners, to carry out 21 separate developments.
Besides equity-based finance, SOEs are increasingly looking towards diversified sources of debt financing to meet their needs.
"SOEs such as Perusahaan Listrik Negara, Pertamina or Garuda Indonesia have traditionally opted for conventional bank loans," Aloysius Kiik Ro of the SOE Ministry told OBG.
"As infrastructure development is a long-term endeavour, asset-backed securities are therefore increasingly utilised."
Moreover, with Indonesia further seeking to tap Islamic financial markets for funding to support infrastructure developments, the central bank announced on October 9 that the sharia hedging facilities would now be available as a provision of sharia loans, a first in the country.
The move towards alternate methods of financing comes amid efforts to fund the country's significant medium-term infrastructure programme.
Indonesia has a pipeline of 223 separate projects with a combined budget of $307bn. Of this, the government is looking to the private sector to generate $180bn, approximately 60% of the total, with state enterprises to raise the balance.
While infrastructure development has been a driving force in the economy in recent years, supporting GDP expansion of around 5% per year since 2013, a new OECD report has shown that low state revenues, in part due to a narrow tax base, were preventing higher levels of infrastructure spending.
This has subsequently limited efforts to narrow Indonesia's infrastructure gap and constrained development, the report said, necessitating the need to look for alternative forms of capital.