AlternativesSeptember 24, 2019

CPPIB Announces First Indonesian Infrastructure Investment

Fund to buy a 45% stake in one of the Asian nation’s top toll roads.

Reported by Chris Butera

The Canada Pension Plan Investment Board is about to make its first infrastructure investment in Indonesia–a toll road.

The C$400 billion ($301.4 billion) fund is acquiring a 45% stake in PT Lintas Marga Sedya, the owner and operator of the Cikopo-Palimanan (Cipali) toll road. PT Baskhara Utama Sedaya, a current owner of Lintas Marga, will boost its holdings in the venture by 10%, from 45% to 55%.

“As CPPIB’s first infrastructure investment in Indonesia, this deepens the fund’s commitment to the Asia-Pacific region as well as our focus on investments in new markets with attractive return and risk characteristics,” said Suyi Kim, the fund’s senior managing director and head of Asia Pacific.

The 117km (72.7-mile) Cipali is one of Indonesia’s longest operational toll roads, and one of the main lines of transportation to and from the island of Java.

“Cipali toll road provides CPPIB access to a vital infrastructure development supported by rising motorization rates in one of the most densely-populated and economically-productive regions in Indonesia,” said Scott Lawrence, the plan’s managing director and head of infrastructure.

The deal is expected to finalize within the next several months.

The Canada Pension Plan Investment Board had about $25 billion invested in infrastructure as of June 30.

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