The Minister of Finance has issued Regulation No. 100/PMK.010/2009 to facilitate the implementation of Article 8 of Presidential Regulation No. 9 of 2009 on Financial Institutions. Generally, the regulation sets out the business activities of financial companies, procedures for establishment, ownership and administration, branch offices, loans and fund injections and fund placement, reporting, and sanctions, among other matters.
The regulation also includes nine attachments. These attachments are copies of all the necessary standard forms that must be submitted in order to comply with the provisions of the regulations.
The primary functions of infrastructure financing companies are direct lending, refinancing, and subordinated loans. These activities are to be supported by programs such as credit enhancement, advisory services, equity investment, swap markets, and other facilities as agreed by the Minister.
There are strict financing limits in place. However, where a company exceeds those limits, the company must notify the Minister and forward an action plan as to how the company intends to rectify the breach. Companies have one month to make this notification and submit the report.
The infrastructure projects that may benefit from these provisions, among others, include: transportation (sea, river, lake, air, and rail), roads, water systems, drinking water, waste water, telecommunications, electricity, oil and gas, and any other infrastructure project approved by the Minister.
Finance companies are to be established as either limited liability companies or cooperatives. Foreign businesses may be involved, but there are strict conditions on entry such as being explicitly involved in infrastructure. The application process is set out in detail in the regulation in articles 8 – 10. The paid up capital for a finance company required for establishment is IDR 100 billion, and this it to be increased to IDR 2 trillion within five years of the company being established and the necessary licenses being granted.
The cancellation of licenses requires at least one of a number of conditions to occur. Simply, the company is wound up or dissolved, the company no longer operates in the infrastructure sector, the company is merged or acquired or consolidated, or the company is subject to sanctions noted elsewhere in the regulation (article 37).
The regulation has been in force since 27 May 2009.
The Minister of Finance has issued Regulation No. 100/PMK.010/2009 to facilitate the implementation of Article 8 of Presidential Regulation No. 9 of 2009 on Financial Institutions. Generally, the regulation sets out the business activities of financial companies, procedures for establishment, ownership and administration, branch offices, loans and fund injections and fund placement, reporting, and sanctions, among other matters.
The regulation also includes nine attachments. These attachments are copies of all the necessary standard forms that must be submitted in order to comply with the provisions of the regulations.
The primary functions of infrastructure financing companies are direct lending, refinancing, and subordinated loans. These activities are to be supported by programs such as credit enhancement, advisory services, equity investment, swap markets, and other facilities as agreed by the Minister.
There are strict financing limits in place. However, where a company exceeds those limits, the company must notify the Minister and forward an action plan as to how the company intends to rectify the breach. Companies have one month to make this notification and submit the report.
The infrastructure projects that may benefit from these provisions, among others, include: transportation (sea, river, lake, air, and rail), roads, water systems, drinking water, waste water, telecommunications, electricity, oil and gas, and any other infrastructure project approved by the Minister.
Finance companies are to be established as either limited liability companies or cooperatives. Foreign businesses may be involved, but there are strict conditions on entry such as being explicitly involved in infrastructure. The application process is set out in detail in the regulation in articles 8 – 10. The paid up capital for a finance company required for establishment is IDR 100 billion, and this it to be increased to IDR 2 trillion within five years of the company being established and the necessary licenses being granted.
The cancellation of licenses requires at least one of a number of conditions to occur. Simply, the company is wound up or dissolved, the company no longer operates in the infrastructure sector, the company is merged or acquired or consolidated, or the company is subject to sanctions noted elsewhere in the regulation (article 37).
The regulation has been in force since 27 May 2009.
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