The investment makes the UAE the fund's largest investor. The investment will focus on infrastructure, roads, ports, tourism and agriculture.
Indonesia’s sovereign wealth, the Indonesia Investment Authority (INA), was launched in February with an initial capital $5.4bn. It aims to raise an initial $20bn of investment and is expected to help Indonesia’s domestic and foreign investors raise funds to finance development programmes, especially domestic infrastructure programmes.
John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “This investment into the INA comes on the heels of similar participation by nations such as Japan. Indonesia’s infrastructure needs remain significant, particularly on connectivity across an archipelagic nation. By bringing together domestic and foreign capital through the INA, the sovereign wealth fund should be well positioned to spur greater development. Transparency and accountability will however need to be key cornerstones for its investment activities.”