MINISTRY OF FINANCE

THE REPUBLIC OF INDONESIA

Indonesia Infrastructure Development

Presented by:
Freddy R. Saragih
Director of Government Support and Infrastructure Financing Management
Ministry of Finance
The Republic of Indonesia

Singapore, April 2015

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 Click to editOutline
Master title style

PPP Projects Development

Non-PPP Infrastructure Projects and

Policies

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 PPP Project
Development

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 Estimated Funding Source for Infrastructure Development
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(2015-2019)

+ USD 164.83 billion Gov’t and Local

Gov’t and Local
Budget Budget
(41.25%)
Strategic
Infrastructure
Investment + USD 88.83 billion
SOE (22.23%)
USD 399.97
Alternative
billion
Financing
Financing Gap Scheme
+ USD 145.92 billion
Private (36.52%)

*) source : Ministry of Planning, 2015

GOI needs alternative financing scheme for infrastructure development. PPP offers a
reasonable answer.
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Indonesia
• The Government of Indonesia (GoI) considers PPP as an option to
support infrastructure development;
• To support such PPP policy, the GoI has made certain facilities for
PPP Projects and established PPP Unit within Ministry of Finance.
• Currently, GoI has a new PPP regulation, called Presidential
Regulation (PR) number 38/2015, which accommodate some main
issues on government’s infrastructure development policies , such
as :
 Broaden the PPP infrastructure sector to social infrastructure
sector
 Provide availability payment scheme to ensure the availability
of infrastructure services
• On the other hand, the new business process is defined for
infrastructure priority projects regulating in Presidential Regulation
(PR) number 75/2014.
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MasterProcess
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Pre-Qualification Contract Signing
RFP

OBC FBC
Preparing Tender
Document

Project Prioritization Strategic Funding

Decision
KPPIP/IAC
PPP Unit

• Identifying the PPP Project
Proposal
• Analysing VfM and PSC
• Analysing the need of VGF
and guarantee
• Analysing the need of
project preparation
• Setting up the standard
document for PPP Co.
procurement process
Providing Project Development Providing PDF for
Fund (PDF) for PPP Project Transaction Advisory
Preparation
Processing VGF Application
Processing Guarantee Application
Controlling, Evaluating, and Documenting the Implementation of
Government Support

*Note: OBC= Outline Business Case

FBC= Final Business Case
IAC = Infrastructure Acceleration Committee 6
 Click to edit Master
The Establishment of title style
PPP Unit
Become the champion for project preparation and enabling
Broad Objective environment to accelerate the PPP Agenda

Improve quality of project selection under KKPPI – OBC

criteria

Support the Project Preparation through PDF support use a

high quality Transaction Advisor

Core Mandates Act on behalf Minister of Finance in providing Govt support

approvals for projects in particular stages in bidding
process. Monitor contract implementation for VGF

coordinate all public finance instruments so project has a

single financing/ guarantee support package from VGF,
IIGF, SMI, PIP

Provide Input for PPP Policy Devt. and Regulations

Additional
Implement capacity building program to GCA
mandates
One stop shop for PPP promotion & Information
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Fiscal Supports title Project
PPP Infrastructure style
MOF

PDF Viability Guarantee Infrastructure

Gap Fund (IIGF) Fund (SMI/IIF) AP

Project Construction Cost Project

Preparation Policy Risk Demand Risk
Contribution Financing

Preparation Bidding Construction Operation

 Project Development Facility (PDF): To enhance project bankability (implemented by PT SMI assignment);
 Viability Gap Fund (VGF): To increase the financial viability of PPP project ;
 Indonesia Infrastructure Guarantee Fund (IIGF): To guarantee for infrastructure risks;
 Infrastructure Fund: To offer long term financing for infrastructure projects;
 Availability Payment (AP) : Currently, MOF structuring the operationalization of this scheme to ensure the
availability of infrastructure service that provided by PPP Co.
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Viability Gap Fundtitle style

“VGF is the government fiscal policy to support the infrastructure provision

through the PPP scheme”

 Legal Context
 Presidential Regulation (PR) No. 56/2011 as a second revision of PR No. 67/2005
concerning the Infrastructure Provision through Public-Private Partnership
 In PR No.56/2011, Government is allowed to provide government support and guarantee
 Section 17A (4) PR No. 56/2011: Minister of Finance may approve the provision of Government
support in the form of tax incentives and/or financial contribution based on the proposal from the
Government Contracting Agency (Minister/Head of Institution/Head of Local Government)

 Minister of Finance Regulation Number 223/2012 concerning Construction Cost

Contribution for PPP Project.

Objectives of VGF (MOF Regulation Number 223/2012 ):

1. To increase the financial viability of the project;
2. To increase certainty of infrastructure project provision in accordance to the designed quality and timing;
3. To enhance the public services provision through the infrastructure with affordable tariff.

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Infrastructure Guaranteetitle style
Scheme

NOTE : B exists on if A exists, i.e. if A is part of the guarantee structure provides to the Investor/Lenders

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List to edit
of PPP Master title style
Project
PROJECT TOTAL PROJECT (IDR) UPDATED STATUS

POWER SECTOR List of PPP Project

Central Java Power Plant 40 trillion Finalizing the rest of land acquisition (handled by PLN)

Final tender documents has been issued on Des 2014 and GCA
Mine Mouth 9-10, South Sumatera 54 trillion
will hold Bid submission on Mei 2015

Oil Refinery, Bontang Approx. 60 trillion Minister of MEMR has informally pointed Pertamina as CA

WATER SECTOR

Umbulan Water Supply 2 trillion Processing VGF proposal

Lampung Water Supply 1 trillion Waiting for VGF nominal approval from MOF

West Semarang Water Supply 765 billion Waiting for VGF “in principle” approval from MOF

TRANSPORTATION

Airport Railway-Soekarno Hatta 24 trillion

Completing PQ’s documents (VGF proposal)
International Airport

Manado-Bitung Toll Road 4.3 trillion Determined as PPP Project

Balikpapan-Samarinda Toll Road 11.4 trillion Determined as PPP Project

Non-PPP Infrastructure
Projects and Policies

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Sumatera
• Trans Sumatera Toll Road is MP3EI priority project with high strategic and economic
importance. However, the project is financially not bankable, thus private sector
involvement is considered to be not a feasible solution.
• As mandated by Government Regulations No.43/2013, in the event that the toll
road is economically feasible but not financially feasible, the government funding
for toll road concession is limited, and to accelerate regional development, GoI may
appoint SOE (wholly state-owned) to deliver the toll road project.
• Hutama Karya (HK) is assigned by Government to develop the Trans Sumatera
project. To deliver the project, HK sees that timing is crucial, thus the
commencement of Phase I construction and land acquisition must be kick start in
2014.
• HK will transform itself from Construction SOE into BUJT (Badan Usaha Jalan Tol).
HK will then transfer all its existing assets to its subsidiary HK Konstruksi.
• On financing strategy, HK will leverage the equity injection by GoI through PMN. In
addition, HK is expected in utilizing cheap funding sources that is eligible backed up
by GoI guarantee and bringing equity partners to share the risks.

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SOE style
• GoI has committed to accelerate infrastructure development and
stipulated this agenda as a national priority development agenda in 2015-
2019.
• To enable this agenda, GoI support direct financing from Multilateral
Development Banks (MDBs) to SOE.
• This strategy has been considered to speed up the decision making process
and it relatively has lower risk than SLA mechanism because the lender
could directly scrutinize the SOE’s disbursement planning.
• GoI through MoF will provide guarantee for SOE with some certain eligible
criteria.

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Government Master
Guarantee title Sector
on Power style

 According to the Presidential Decree Number 4/2010, the

Government through the Ministry of Finance provides
Business Viability Guarantee to PT PLN (Persero) in
developing the 2nd Fast Track Programs.
 The guarantee states a commitment of the Government that
is stipulated in MoF Regulation Number 173/2014 to ensure
that PT PLN (Persero) will be able to fulfill its financial
obligations under related PPA.
 The guarantee is eligible only to the projects as listed in the
Ministry of Energy and Mineral Resource Regulation No.
15/2010 jo. Ministry of Energy and Mineral Resource
Regulation No. 01/2012.

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Thank You

DIRECTORATE OF GOVERNMENT SUPPORT AND INFRASTRUCTURE FINANCING MANAGEMENT

DIRECTORAT GENERAL OF FINANCING AND RISK MANAGEMENT
MINISTRY OF FINANCE , GOVERNMENT OF INDONESIA

Frans Seda building 1st floor

Dr. Wahidin 1, Jakarta 10710
Phone (+6221) 3510722; Fax (+6221) 3447386
www.risiko.fiskal.depkeu.go.id

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