Public-Private Partnership or PPP is a long-term contract between a private party and a government entity, for providing a public asset or service, in which there are transfer of risks and responsibility from the government entity to the private party and remuneration is linked to performance.

In Indonesia, the implementation of PPP is enabled through several legal basis:

TRANSPORTATION

ROAD

WATER RECOURSES AND IRRIGATION

SEWERAGE SYSTEM (OFF-SITE SYSTEM)

WATER

SEWERAGE SYSTEM (ON-SITE SYSTEM)

WASTEWATER TREATMENT

TELECOMMUNICATIONAND INFORMATIC

ELECTRICITY

ENERGY CONSERVATION

URBAN AREA FACILITIES

INDUSTRIAL AREA

TOURISM

EDUCATION, RESEARCH, AND DEVELOPMENT

FACILITIES

CORRECTIONAL INSTITUTION

PUBLIC HOUSING

HEALTH

SPORTS, ARTS, AND CULTURAL FACILITIES

Eligible Types of Infrastructure for PPP There are 18 eligible sectors for PPP in Indonesia

Social InfrastructureEconomic Infrastructure

MINISTRY OF FINANCEREPUBLIC OF INDONESIA

KEMENTERIAN KEUANGANREPUBLIK INDONESIA

The Presidential Regulation No. 38 of 2015 on the Public-Private Partnership in Infrastructure Provision governs the overall arrangement of PPP including eligible sectors.

Ministerial Decree of National Development Planning No. 4 of 2015 on the Mechanism of the Public-Private Partnership in Infrastructure Provision details the business processes of PPP planning, preparation, and transaction and contract management, for both solicited and unsolicited projects.

The Chief of LKPP’s Regulation No. 19 of 2015 on Procedures for Procurement of Government Cooperation with Business Entities in the Provision of Infrastructure governs the procurement of PPP by government entities.

The Chief of LKPP’s Regulation No. 29 of 2018 on Procedures for Procurement of Government Cooperation with Business Entities in the Provision of Infrastructure governs the procurement of PPP by government entities on initiative of the Minister / Head of National Agencies / Governor / Mayor.

PPP Stakeholders

GCA (Minister/Chairman of the Institution/Head of Region/State-Owned

Enterprise/Regional-Owned Enterprise)

Special PurposeVehicle

PPP CONTACT

Indonesian Ministry of National

Development Planning

Ministry of Finance

Indonesian National Land Agency

Indonesian Investment

Coordinating Board

Technical Ministry

SUPPORT

SPONSOR

LENDER

EQUITY

DEBT

Public-Private Partnership in Indonesia

INDONESIA PPP DAYBeyond Boundaries: Indonesia as a Global PPP Investment Destination

MINISTRY OF FINANCEREPUBLIC OF INDONESIA

Hosted by Presented by

PPP Plan

Preliminary study and Public

Consultation

Value for Money Test

PPP Project Implementation

Decision

Outline Business Case

Market Sounding

ProposingGovernment Support

(if required)

Final Business Case

Pre-qualification

Request for Proposal and Bid

Submission

Evaluation and Bid Award

SPV Establishing

Signing PPP contract

Financial Close

Construction

Operation and Transfer

Handback

PPP Planning PPP Preparation PPP Transaction PPP Contract Management

PPP Business Process

Government Facilities for PPP

PROJECT DEVELOPMENTFACILITY/PDF

VIABILITY GAP FUND/VGF

INFRASTRUCTURE GUARANTEE

AVAILABILITY PAYMENT/AP

Facility provided by Ministry of Finance to help GCA to prepare preliminary study, bidding documents, and assist the GCA in the PPP project transaction

Legal Basis: Minister of Finance Regulation No. 73 of 2018

Facility in form of contribution of some of the construction cost, given in cash to a PPP project that already economically visible but has not had a financial feasibility

Legal Basis: Minister of Finance Regulation No. 223 of 2012

Guarantee given on GCA’s financial obligation

Infrastructure guarantee is implemented by IIGF as a single window policy

Legal Basis: Presidential Regulation No. 78 of 2010, Minister of Finance Regulation No. 260 of 2010

Periodic payment by the Minister/Chairman of the Institution/Head of Region to

enterprise for providing infrastructure services

Legal Basis: Minister of Finance Regulation No. 260 of 2016, Minister of Home

Affairs Regulation No. 96 of 2016

MINISTRY OF FINANCEREPUBLIC OF INDONESIA

KEMENTERIAN KEUANGANREPUBLIK INDONESIA

PT Indonesia Infrastructure Finance is a private non-bank financial institution, supervised by the Ministry of Finance, established under The Ministry of Finance Decree (PMK) No. 100/2009, with an objective to invest in commercially feasible infrastructure projects in Indonesia. As a catalyst in infrastructure financing through provide financing for infrastructure in Indonesia, PT IIF works closely with infrastructure sponsors, financial sector, and the Government of Indonesia. PT IIF also pioneers the availability of various specifically designed long term financing instruments for infrastructure projects. One of the PT IIF’s portfolio is provide financing for Umbulan Water Supply Project which has total length of 92,3 km with total capacity of 4,000 liters/second that targeted to meet water needs of 1.3 million residents in East Java.

www.iif.co.id

PT Penjaminan Infrastruktur Indonesia (Persero) is 100% Owned by Government of Indonesia under direct supervision of the MoF and established under The Ministry of Finance Decree (PMK) No. 8/2016. PT PII is formed as a Single Window in providing guarantees for infrastructure projects in order to enhance the credit worthiness of infrastructure projects. PT PII Guarantee supports the continuation of the project through a careful analysis of safeguard and establishes discipline in risk management for the benefit of the government so the fair risk allocation between government and private investor is achieved. Until 2018, PT PII has provided guarantee for 16 PPP Projects with total projects value of USD 12 billion and has aimed USD 14.5 billion of guarantee project value.

www.iigf.co.id

PT Sarana Multi Infrastruktur (Persero) has established since 2009 as a State Owned Enterprises (SOE) with 100% shares owned by the Government of Indonesia through the Minister of Finance. PT SMI has played an active role in preparing and financing PPPs, working together with Line Ministries as well as Local Governments in realizing PPP projects. One of the PT SMI’s catalystic activity in PPP project development in Indonesia is preparing PPP project and assisting in transaction phase through Project Development Facility (PDF). PT SMI also provides facility for parties that have plan in developing infrastructure such as conducts capacity building and provides assistance to Ministry/Agency and Local Government to identify and develop priority projects. Until 2018, PT SMI has prepared 13 PPP projects under PDF.

www.ptsmi.co.id

Project Name Investment Return Scheme

PDF Budget (USD Million)*

PDF Realization (USD Million)*

PPP project Value (USD

Million)*

Status

Bulk Water Supply (SPAM) Umbulan User Payment 4.00 3.30 144.83 Constuction

Airport Fast Train User Payment 20.25 7.83 1,675.86 Stop

Palapa Ring Fiber Optic Network (3 Package) Availability Payment 1.59 0.83 537.24 Constuction

Bulk Water Supply (SPAM) Bandar Lampung User Payment 2.55 1.17 75.86 Financial Close

Medan City Transportation System User Payment 5.86 0.28 441.38 Preparation

Bulk Water Supply (SPAM) Pekanbaru User Payment 1.93 33.38 Preparation

Krian Regional General Hospital, Sidoarjo Availability Payment 2.14 0.14 17.24 Transaction

Bulk Water Supply (SPAM) West Semarang User Payment 2.21 0.28 31.59 Signed PPP Contract

Pirgadi Regional General Hospital, Medan Availability Payment 2.21 65.52 Preparation

National Road of East Sumatera Availability Payment 2.41 220 Transaction

Makassar Pare-pare Railway Availability Payment 1.59 82.76 Transaction

University-owned Hospital os Sam Ratulangi, Manado Availability Payment 1.66 26.69 Preparation

Dharmais Cancer Hospital Availability Payment 1.45 137.24 Preparation

Hang Nadim Airport User Payment 2.00 157.24 Preparation

National Integrated Social Welfare System Availability Payment 2.07 78.62 Preparation

Dr.Zai8nul Abidin Regional General Hospital, Aceh Availability Payment 179.31 Preparation

PPP Projects with Project Development Fund (PDF)

Project Development Fund

PreparationAvailability PaymentPublic Street Lighting, Surakarta

* USD 1= IDR 14,500

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