JAKARTA – indonesia requires significant private sector involvement to address a massive funding shortfall for its ambitious infrastructure development plans, according to Minister of Finance Sri Mulyani Indrawati.

The nation needs an estimated 625.37 billion US dollars, equivalent to Rp 10,151 trillion, for infrastructure projects between 2025 and 2029. The government’s budget cannot fully cover this enormous sum.

The central government can only finance 23 percent of the total infrastructure needs, amounting to 143.84 billion US dollars. Local governments can cover approximately 17 percent,or 106.31 billion US dollars.

Private Sector is Expected to Cover 30% of the Budget

Speaking at JCC, Jakarta, on thursday (6/13/2026), Minister Indrawati stated, “The total infrastructure investment needs for the 2025 to 2026 period are estimated at around 625 billion US dollars. The government budget combined with the local government budget will cover around 40 percent. So we certainly face this funding gap.”

“The total infrastructure investment needs for the 2025 to 2026 period are estimated at around 625 billion US dollars.”

To bridge this gap, the government is looking to the private sector to play a crucial role, as infrastructure development is vital for stimulating economic growth.

State-Owned Enterprises (BUMN) are expected to contribute 30 percent of the required infrastructure budget, or 187.61 billion US dollars,with the private sector also contributing 30 percent.

This leaves a total investment need of 375.22 billion US dollars to be met by private and other sources during the 2025-2029 period.

Minister Indrawati emphasized, “This will require the participation of the private sector and also the support of many partners and also demand the creation of innovative funding mechanisms.”

Global Challenges Impacting Infrastructure Development

Beyond budgetary constraints, infrastructure development faces challenges from a deteriorating global landscape. Geopolitical tensions, fragmentation of the world economy, and a slowdown in global economic growth are narrowing the country’s fiscal flexibility.

The risks associated with climate change also pose a threat. The World meteorological Organizations have warned of potentially record-breaking global temperatures in the next five years, which could lead to large-scale population displacement and other disruptions.

“Infrastructure consumes about 60 percent of the world’s raw materials.This underlines the urgency to integrate the sustainability into the infrastructure life cycle from planning to implementation,” Minister Indrawati noted.