Jakarta, 1 July 2025 – The Indonesian government has raised concerns over the growing impact of global uncertainty on the national economy. The ongoing conflict in the middle east as well as the escalating US–China trade war is considered as a key driver behind the weakened export performance, mounting pressure on the Indonesian rupiah, and surging global commodity prices.

This was conveyed by Indonesia’s Minister of Finance, Sri Mulyani Indrawati, during the June 2025 edition of the “APBN Kita” press briefing at the Ministry of Finance in Jakarta on Tuesday, (17/6). According to her, the current global landscape presents a complex risk combination: rising inflation amid a slowdown in the world economy.

“Risks for Indonesia must be carefully monitored. The weakening of the global economy will impact our exports. While some commodity prices have spiked, the cause is not market-driven but rather due to supply chain disruptions,” she explained.

Amid an increasingly uncertain global landscape, the national infrastructure development sector is also facing new challenges. In response to this, PT Indonesia Infrastructure Finance (IIF) emphasizes that the momentum toward sustainable development must continue and remain a primary goal to reduce Indonesia’s dependence on fossil fuels and to build infrastructure that is more environmentally friendly and sustainable.

Chief Investment Officer IIF, M. Ramadhan Harahap (Idhan) further explained that the conflict in the middle east has triggered systemic effects on global markets, especially in the energy and financial sectors.

“Conflict in the Middle East has directly impacted in the increase of global oil prices and created high volatility in the financing sector. This affects the cost of capital for infrastructure projects, especially those that rely heavily on fossil fuel or imported equipment,” said Idhan.

In line with this statement, IIF views the current global crisis as a catalyst to accelerate structural reforms in the infrastructure sector toward a more resilient and adaptive to changes. Idhan noted that the spike in global energy prices strengthens the investment case for renewable energy projects such as geothermal, solar, and biogas.

“We are at a turning point. This crisis reinforces the urgency for Indonesia to accelerate energy independence through stable and scalable green projects,” he added.

This also aligns with the government’s recent initiative in inaugurating the Battery Energy Storage System (BESS) downstreaming project in Karawang last week, on June 29. On that occasion, President Prabowo Subianto expressed his confidence that Indonesia could achieve energy independence within the next 5 to 6 years. To support this vision, the development of battery manufacturing plants for electric vehicles and solar energy storage systems is deemed essential.

IIF’s financing portfolio has long been directed toward infrastructure projects that contribute directly to the Sustainable Development Goals (SDGs). In addition to financing, IIF enhances the resilience of national infrastructure projects through its comprehensive ESG Advisory services. This strategic support ensures that projects are not only economically viable, but also resilient to global environmental and social challenges.

“We design financing structures that are adaptive to global risks—financial, environmental, and governance-related. This is crucial to ensure that today’s projects will not become tomorrow’s burden,” said Idhan.

As a closing note, Idhan emphasized that IIF will continue to bridge Indonesia’s development needs with a rapidly shifting global context while strengthening partnerships with multilateral institutions and ESG-oriented investors.

“Geopolitical challenges are not a reason to halt progress. On the contrary, they serve as a reminder that the infrastructure of the future must be stronger, greener, and more self-reliant”, he concluded.

PT Indonesia Infrastructure Finance

PT Indonesia Infrastructure Finance (“IIF”) is a private non-bank financial institution, which is engaged in infrastructure financing and advisory services that are professionally managed and focused on commercially viable infrastructure projects. IIF was established on 15 January 2010 at the initiative of the Government of the Republic of Indonesia. Currently, the ownership of IIF is held by PT Sarana Multi Infrastruktur/SMI (Persero), Asian Development Bank (ADB), the International Finance Corporation (IFC) which is part of the World Bank, Deutsche Investitions-und Entwicklungsgesellschaft (DEG) which is fully owned by KfW, and Sumitomo Mitsui Banking Corporation (SMBC).

In its operations, IIF applies best practices based on international standards in providing credit, risk management, good corporate governance, and social and environmental protection standards to ensure the sustainability of infrastructure development in Indonesia.

Further Queries:

Nastantio W. Hadi
Head of Legal and Corporate Secretary Division
PT Indonesia Infrastructure Finance
Telp: (021) 2991 5060;
Fax: (021) 2991 5061;
E-mail: [email protected]

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