The document outlines Indonesia's strategy for infrastructure development from 2010-2014. It aims to improve infrastructure services, support industry competitiveness, and enhance public-private partnerships. A dual-track strategy is proposed to accelerate goods and information flow through key infrastructure projects and encourage industrialization around priority economic corridors. Reforms to laws and institutions establish guidelines for private sector involvement in infrastructure projects through PPP schemes. Various financing options and government incentives are discussed to attract investment for infrastructure development opportunities, especially in ports.

1. 10/11/2011
STRATEGY ON INFRASTRUCTURE DEVELOPMENT IN FIVE-YEAR
NATIONAL DEVELOPMENT PLAN 2010-2014
 Increasing infrastructure’s level of service to
comply with minimum standard of service.
 Supporting the improvement of real sector
competitiveness.
 Enhancing Public Private Partnership:
ECONOMIC VIABILITY AND
 Shifting government role to be facilitator or enabler .
FINANCING OF NEW PROJECTS
 Focus on service sustainability through efficient and effective
investment.
Presented at:
National Investment Seminar, 20 July 2010  Dual Track Strategy:
 Developing infrastructures which accelerate goods and information
Dedy S. Priatna
flow, and
Deputy Minister for Infrastructure Affair
National Development Planning Agency  Encouraging industrialization program through regional centers
development in 6 Priority Economic Corridors.
2
ACHIEVEMENTS: THE CHANGING OF INFRASTRUCTURE LAWS REFORMATION ON INSTITUTIONAL FRAMEWORK IN PPP
GENERAL DEVELOPMENT
PRESIDENTIAL REGULATION NO. 67/2005 PRESIDENTIAL REGULATION NO. 13/2010 &
FRONT OFFICE
PRESIDENTIAL REGULATION NO. 56/2011 1b BACK OFFICE
KKPPI BAPPENAS
(RPJMN)
PRESIDENTIAL REGULATION NO. 42/2005 PRESIDENTIAL REGULATION NO. 12/2011 3
2
GOVERNMENT GUARANTEE 4
KEMENKO-EKON
MINISTRY OF KKPPI BKPM GENERAL
MOF REGULATION NO. 38/2006 PRESIDENTIAL REGULATION NO. 78/2010 & MOF FINANCE INVESTORS
REGULATION NO. 260/2010
• PIP
LAND ACQUISITION • PT PII (IIGF)
• PT SMI (IIF) PROJECT
PRESIDENTIAL REGULATION 36/2005 JO DRAFT OF LAND ACQUISITION LAW SPECIFIC
INVESTORS
PRESIDENTIAL REGULATION NO. 65/2006 1a
PPP GUIDELINE 5
NONE - MINISTRY OF NATIONAL DEVELOPMENT Government Contracting Agency 6
(GCA)
PLANNING REGULATION NO. 4/2010 ON PPP 7 UKP4
GUIDELINE
- MINISTRY OF TRANSPORTATION REGULATION NO. LEGEND
1. Project Preparation by GCA, National Development Planning Agency (Bappenas), and MoF.
83/2010 ON PPP TRANSPORTATION GUIDELINE 2. Preparation of PPP Book and finalization of “ready to offer projects” by National Development Planning Agency , MoF, and BKPM
3. Recommendation of technical and financial feasibility by The Committee for the Acceleration of Infrastructure Provision (KKPPI) and PT IIGF (if any
SEA TRANSPORT & PORT project guarantee were available) .
4. Market Sounding by BKPM
Law Number 21/1992 Law Number 17/2008 5. Feedback (input) is gathered from market sounding, potential investor is identified, and transaction process is facilitated.
6. Project Tender Process by GCA
Government Regulation 61/2009 7. Monitoring by Presidential task Force for Supervision and Monitoring of Development (UKP4 )
4
1

2. 10/11/2011
INFRASTRUCTURE FINANCING SCHEME IMPLEMENTATION OF FINANCING ALTERNATIVES ON PPP SCHEME
GOI INFRASTRUCTURE PRIVATE
INVESTMENT PLAN INFRASTRUCTURE
Project Feasibility Scheme
State Budget Public Private Private Sector Private
(APBN) Partnership (PPP) Economically viable
1 Hybrid Financing
Financially not viable Public
Private
External Domestic Economically viable PPP with
Government External 2 Government Support
Loans/Grants Sources
Guarantee Financing PPP Financially Marginal Public Private
(PHLN) (Rupiah)
To fund Government • For financially viable
priority projects with projects with high
high economic and economic returns; Private
social returns such • Minimum requirement Economically viable
as roads and for government support 3 Regular PPP
SOE’S PPP geothermal power and/or guarantee Financially viable Private
Project Project plant
Operation and Maintenance
Blue Book PPP Construction
Book
5
6
Role Sharing in Infrastructure Financing CREATING THE ENVIRONMENT FOR PPP
External Financing State Budget
Loan/Grant PPP APBN
To support To fund private • For financially To fund
Government sector viable projects Government
financing gap in initiatives in with high priority projects
funding developing and economic with high
Government priority implementing returns. economic and
projects with high Private or PPP • Minimum social returns such
economic and Project requirement for as roads and
social returns (blue government geothermal power
book). support and/or plant.
guarantee.
Mobilizing private sector fund is a must in order to accelerate the port • Almost all the PPP element are available
• The question are how can they synergize all the components
development, thus PPP is a scheme that GOI has to opt.
8
7
2

3. 10/11/2011
INCENTIVES PROVIDED BY GOVERNMENT AGENDA FOR PPP DEVELOPMENT IN ORDER TO ATTRACT
FOREIGN INVESTMENT
 Direct Support
– Fiscal contribution, land, permits, tax incentive, part of construction, etc.  Land:
– Completion of Land Act
 Contingent Support
– Contingent Support is regulated by Presidential Regulation 78/2010, which is – Provision of Land Fund in State Budget (on top of regular allocation)
expected to generate more infrastructure PPPs than before since the provision of – Land provision by the Government:
government guarantees is more clearly defined.
– Financially viable project  Loan to project
 Tax Incentives – Financially marginal/non viable project  Subsidy to project
– For certain types of projects the Government, through the Ministry of Finance, may
extend tax incentives to private partners.
 Allocation of government support in State Budget
 PPP One Stop Service
 Special Economic Zones
– Under Law No. 39 of 2009 on Special Economic Zones, the Government may  Tax Holiday for infrastructure investor
provide certain tax incentives and licenses for business activities conducted within a
Special Economic Zone or Kawasan Ekonomi Khusus (KEK), such as:  Project Development Facility Revolving Fund
• Facility for Income Tax.
• Reduction of Land and Building Tax (Pajak Bumi dan Bangunan).  Exploration suitable PPP financing scheme
• Facility to import goods at reduced tax rates into the special economic zone;
• Facility to obtain business licenses.  Guarantee Fund enhancement.
9 10
COMMON PPP STRUCTURE IN INDONESIA GOVERNMENT GUARANTEE FOR SOE’S PROJECT
Government
Authority GOVERNMENT
Sponsor
GUARANTEE
Government Advice Advisors to
Project Agency
Team
Loan
PPP PUBLIC Sector
Project SOE BANK
Agreement PRIVATE Sector
PPP Co. Debt
Advisors & Advice Debt Finance Providers
Consortium SPV
Consultants
to the SPV Due (Special Purpose
PROJECTS
Equity Finance Equity
Diligence Vehicle)
Partners
Design & Facilities Specialist
Design Team
Construct Manager, Operator Example : 10.000 MW PLN Project Phase I
& Architect
Contractor Operator Services
11 12
3

4. 10/11/2011
GOVERNMENT GUARANTEE FOR PPP PROJECTS
Investment Opportunities in Ports
MOF
RMU
No. Project & Location Financing Contracting Agency
Counter Guarantee for Guarantee Facility 1. Rembang Port, Central Java Province US$ 346.75 Million Local Planning Development Board of
Equity / Guarantee / Backstop Rembang Regency
2. Maloy International Port, Kutai Timur - US$ 484.20 Million Local Planning Development Board of
Proposal for Guarantee Contracting Agency East Kalimantan East Kalimantan Province
(Ministry, SOE,
MOF 3. Expansion Of Teluk Sigintung Port in Seruyan US$ 89 Million Local Planning Development Board of
Regional Govt) District, Central Kalimantan Central Kalimantan Province
Recourse Agreement
4. Expansion Of Kumai Port In Kotawaringin US$ 56 Million Local Planning Development Board of
Barat Regency, Central Kalimantan Central Kalimantan Province
PPP Agreement
5. Lupak Dalam Port, Central Kalimantan US$ 33 Million Local Planning Development Board of
Liquidity / Guarantee Facility
Central Kalimantan Province
Multilateral Investor 6. Expansion Of Anjir Kelampan and Anjir US$ 89 Million Local Planning Development Board of
Development Serapat, Central Kalimantan Central Kalimantan Province
Agency 7. Expansion of Tanjung Priok Port, Kalibaru, US$ 1,170 Million Ministry of Transportation
Jakarta
Government guarantee for PPP Project is regulated by Presidential Regulation 78/2010 and Ministry 8. Expansion of Tanjung Priok Port, Cilamaya, US$ 1,032 Million Ministry of Transportation
of Finance Regulation 260/2010. It covers one or more Contracting Agency’s obligations pertaining to: Karawang , West Java
9. Bojonegara Port Development Plan, Serang US$ 1 Billion Ministry of Transportation
• Land acquisition • Change in law/regulations
Regency, Province Of Banten
• Revenue risk, • Enforcement risk
• Licenses, permits, and approvals • Breach of contract 10. Pelaihari Coal Terminal, South Kalimantan US$ 26.44 Million Ministry of Transportation
• Demand risk • Standalone termination risk
• Financial close delay/failure • Integration with network 11. Cuise Terminal Of Tanah Ampo, Bali Province US$ 16 Million Ministry of Transportation
• Pricing risk 13 14
FINAL NOTES
Investment Opportunities in Ports (cont’d)
Port Project (Continue)
 Government of Indonesia is committed to maintain the momentum of
investment friendly environment and is exploring all options in
No. Project & Location Financing Contracting Agency encouraging private participation in infrastructure, especially port
12. Shipping Lane Development Of Belawan Phase I US$ 6.9 Million PT. PELINDO I (Persero) development.
Port, North Sumatra Province Phase II US$ 13.5 Million
Phase III US$ 27.3 Million
 Basic instrument to enhance the financial viability and to catalize
13. Bulk Terminal In Kuala Enok Port, Riau US$ 21.1 Million PT. PELINDO I (Persero)
Province private financing of the project has been in place, such as PT.
14. Developing Lane To Support The US$ 35 Million PT. PELINDO III (Persero) Sarana Multi Infrastruktur, PT Indonesia Infrastructure Fund Facility,
Development Of Tanjung Perak Port,
Surabaya – East Java Province
PT. Indonesia Infrastructure Guarantee Fund, Government
15. Expansion of Tanjung Priok Port, Kalibaru, US$ 1,170 Million Ministry of Transportation Investment Center.
Jakarta
 The Government of Indonesia is also open to private sector
initiatives (unsolicited proposal) in supporting the acceleration of
infrastructure provision.
15 16
4