Abu Dhabi, Dutch, Indonesian Funds Invest in Major Southeast Asia Highway Project

The Abu Dhabi Investment Authority, the Indonesia Investment Authority and Dutch pension fund provider APG Asset Management are investing in Indonesia’s Trans Java Toll Road.

“As one of the world’s fastest growing economies, Indonesia is developing its infrastructure to support increased industrialization and more efficient supply chains,” Khadem Alremeithi, executive director of the ADIA’s infrastructure department, said in a release. “The Trans Java Toll Road is a key part of these plans. We are pleased to support its development through this platform with INA and APG, which will continue to seek additional opportunities to invest in Indonesia toll roads.”

The investment is the first to come out of a 2021 memorandum of understanding signed by the three institutional investors, along with Canadian pension fund Caisse de dépôt et placement du Québec, that established Indonesia’s first toll road investment platform. The Indonesia Investment Authority, also known as INA, is Indonesia’s sovereign wealth fund, while ADIA is the investment institution that invests funds on behalf of the Government of Abu Dhabi, the capital of the United Arab Emirates.

Under the memorandum, the investors agreed to explore opportunities for joint investments. At the time, they said they expected the investment platform to have an investment capacity of up to approximately $3.75 billion; however, their most recent announcement specified a target of up to $2.75 billion in funding.

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The investment made by APG, the ADIA and the INA will go toward construction of the Kanci-to-Pejagan and Pejagan-to-Pemalang sections of the Trans Java Toll Road, which the INA acquired in September 2022. According to the INA, the two toll road sections are “instrumental in boosting regional connectivity in Indonesia,” adding that the roads have seen traffic volume jump approximately 68% over a five-year period, with daily vehicle numbers rising to 22,206 in 2021 from 13,202 in 2016.

“Infrastructure remains a foundational need for supporting the region’s economic growth and delivers stable, risk-adjusted returns for the benefit of APG’s pension fund clients and their participants,” Hans-Martin Aerts, APG’s head of infrastructure and natural resources, said in a release.