Sunda Strait Bridge - Financing

Financing

It is not yet clear how such expensive infrastructure would be paid for. The Indonesian government has said that much of the cost will need to be financed through private sector participation. This reflects the current interest in Indonesia in the use of Public Private Partnerships (PPPs) for investments in infrastructure. One possibility is for the bridge to be financed through a "turn-key project" arrangement. Other options include the offering of shares in the project through an initial public offering (IPO) or establishing a backdoor listing through a company already listed on the stock exchange. There has also been discussion of various tax concessions that might be provided by the Indonesian Government (such as exemptions from import taxes and value-added tax) to facilitate the project.

There have been numerous reports of possible financial support from various governments and firms although no firm arrangements have been announced. Countries, banks and investors who have expressed interest include the Japanese, Chinese and Korean governments, and the GS Engineering and LG group (South Korea), the JG Corporation (Japan), Nippon Koei and Nippon Steel (Japan), China Railway Construction Corporation and the China Development Bank (China), and the U.S. Export-Import (Exim) Bank.