Publication

We are of the view that the outlook for transportation infrastructure such as toll roads, airports, and railways will remain stable in the near to medium term. Previously, the demand for transportation infrastructure services was significantly disrupted by the Covid-19 pandemic amid the mobility restriction and social distancing measures, which later caused a sharp decline in the earnings of transportation infrastructure operators and substantially weakened their credit profiles, particularly during a period when many were in the midst of expanding their operational capacity. However, since 2022, the sector has experienced a rapid recovery, with demand surpassing pre-pandemic levels across most sub-sectors by 2024. This rebound has led to a marked improvement in the financial condition and credit profiles of the majority of industry players. ...

The prospect of municipal bond issuance in Indonesia is promising, offering regional governments an alternative financing source to fund critical infrastructure projects and reduce reliance on central government transfers. Provinces like DKI Jakarta and West Java have the fiscal capacity to leverage municipal bonds but currently underinvest in infrastructure. Regions with moderate fiscal capacity face challenges due to lack of financial management capabilities. ...