Indonesia and Hungary Create Joint Investment Fund of USD 500 Million for Infrastructure Projects

May 2021

Indonesia and Hungary are setting up the Indonesia-Hungary Investment Fund (IHIF), worth USD 500 million, to help finance the Indonesian government’s infrastructure projects. The joint investment fund will be set up with an equal contribution of USD 250 million by each side.

For infrastructure projects planned during 2020-2024, the Indonesian government has allocated a budget of IDR 623 trillion (USD 42.82 billion). However, the estimated cost has risen to more than three times the budget allocation. IHIF’s goal is to ensure a source of funding for national strategic projects in digital infrastructure, clean water treatment, and other public infrastructure.

The fund will also facilitate Hungarian companies’ participation in some USD 1.5 billion worth of infrastructure development projects. One of these strategic projects is the construction of a contactless cashless toll (e-toll) transaction facility based on the Multi-Lane Free Flow (MLFF) system by a Hungarian company, which is planned to be implemented this year.

Since the start of diplomatic relations in 1955, Hungary is an important partner for Indonesia in Central Europe. In 2020, trade between the two countries even increased by 13.35% during the pandemic. Indonesia’s main exports to Hungary are electronic components and natural rubber.

(Sources: Ministry of Foreign Affairs Republic of Indonesia; Budapest Business Journal)

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