BANDUNG - Development funding by relying on Budget Expenditure (APBN) funds is very limited. A way is needed so that the availability of limited funds can be overcome, for example by utilizing local bond issuance.
West Java Governor Ridwan Kamil expressed his desire to issue regional bonds for plans to construct a number of road projects.
"We are asking for help, the Regional Government can issue regional bonds to find funding outside the APBD. It can also be through a public private partnership or bank loan. In Central Java it has begun, borrowing from a regional bank to build a market. Moreover, we have Bank BJB, why not try it, "he said firmly.
He added that the regional bonds would be prioritized to build connecting roads, especially in South Africa. With regional oboligation, the development project can be done quickly without waiting for APBD assistance.
The Head of the OJK Board of Commissioners Wimboh Santoso said that he would encourage the development of the West Java region which is environmentally and socially minded to reduce the risk of social costs going forward. Economic development of a region must prioritize not only economic aspects but also social aspects, and the Environment.
"Development of environmentally sound zones will certainly require large funding and require a long-term and commercially inappropriate lock-up of investment funds. While relying on the APBN is very limited. For this reason, a financing alternative from the regional potential is needed. In response to this need, we will facilitate the West Java Government to issue Regional Bonds as a source of infrastructure financing, "he explained.
Through this instrument, the Regional Government can expand the scope of its infrastructure development, which in turn can increase the stretch of the real sector and improve the welfare of the community in the region.
In addition, the OJK will facilitate the provision of various environmental and social financing alternatives such as green bonds / sukuk and blended finance in completing financing alternatives for the Regional Government by referring to our policies contained in POJK Sustainable Financial Implementation for Financial Services Institutions, Issuers and Public Company.
"We will facilitate the development of industries in West Java that are more competitive considering their huge potential because they are close to Jakarta. The risk of industrial relocation due to labor related problems needs to be addressed. We will encourage the provision of financing from the financial services sector for business expansion, provision of industrial raw materials and aspects of business infrastructure in the form of logistics including warehousing and road infrastructure, "he said. Jo