The Canada Pension Plan Investment Board (CPPIB) will make its first infrastructure investment in Indonesia with the acquisition of a 45 percent interest in PT Lintas Marga Sedaya (LMS), the concession holder and operator of the Cikopo-Palimanan (Cipali) toll road.
The investment will be made in partnership with PT Baskhara Utama Sedaya (BUS), a wholly owned subsidiary of PT Astra Tol Nusantara (Astra Infra). CPPIB and BUS will jointly acquire the 55 percent stake currently held by PLUS Expressways International Berhad, a subsidiary of the UEM Group, ultimately wholly owned by Khazanah Nasional Berhad. BUS is an existing owner of 45 percent of LMS and will increase its stake to 55 percent. CPPIB will acquire the remaining 45 percent stake in LMS.
At 117 kilometers (72 miles), the Cipali toll road is one of the longest operational toll roads in Indonesia and a critical link in the transportation network of the island of Java, part of the Trans Java Toll Road network. It serves as a thoroughfare within West Java, which is Java's most populous and fastest growing province, and it also connects West Java and suburbs of Jakarta with the rest of Java.
"As CPPIB’s first infrastructure investment in Indonesia, this deepens the fund’s commitment to the Asia-Pacific region as well as our focus on investments in new markets with attractive return and risk characteristics," said Suyi Kim, senior managing director and head of Asia Pacific at CPPIB.
The transaction is expected to be completed in the fourth quarter of 2019, subject to customary closing conditions and regulatory approvals.
CPPIB had C$33.1 billion ($24.9 billion) invested in infrastructure assets globally.
