Financial Innovation for Toll Road Infrastucture Development
14 Pages Posted: 14 Jan 2012 Last revised: 15 Sep 2015
Date Written: September 20, 2011
The development of toll road infrastructure in developing countries included Indonesia still slow down. There are many problems to build toll road infrastructure, one of them is financing. The need of toll road infrastructure investment in Indonesia is Rp66,751.95 Billions to build 768.65 km of toll road, and need Rp10,267.37 Billions at Batch 2 and 3 in still bidding preparation to build 154.24 km, and also need Rp7,492.47 Billions to build 125.42 in Batch 4 of toll road, and other toll road is 877.09 km which is need the investment is Rp99,065.15 Billions, so the total of toll road investment financing is Rp216,828 Billions to build 3,087.88 km of toll road. But the Government of Indonesia provide only Rp6,578.70 Billions to participate to build 70.51 km of toll road, there is a gap financing is around 3% between government and private investor.
At this paper, we want to introduce what is financial innovation, what is the function of financial innovation that can accelerate and expand toll road investment, what is the impact of toll road financial innovation that can increase economic growth, and how to use financial innovation for toll road infrastructure development. And we conclude that financial innovation is the method to accelerate and expand toll road investment in Indonesia, and increase economic growth; and also this method can use to other developing countries.
Keywords: financial innovation, toll road
JEL Classification: G32, L91, L92
Suggested Citation: Suggested Citation