TIME AGENDA
09.00 – 10.00 Registration
10.00 – 10.10 Welcome Speech from the Director General of Budget Financing and Risk Management
10.10 – 10.20 Speech from the Ambassador of Canada
10.20 – 10.30 Speech from the Representative of The World Bank
10.30 – 10.45 ● Video presentation on the updates of Indonesia PPP
● Awards to Five Nominees of PDF Facility Recipient
10.45 – 10.50 Photo Group Session
10.50 – 11.50 PLENARY SESSION
“A New Way, A New Opportunity”

Key Discussants:
● Minister of Home Affairs
● Minister of Finance
● Minister of Public Works and Housing
● Mayor of Medan City
● Mayor of Bandar Lampung City

Moderator: Suryo Pratomo
(Economic Challenge)
11.50 – 12.00 Closing
12.00 – 12.15 Press Conference
12.15 – 13.30 Lunch Break
13.30 – 16.00 PARALEL SESSION

Coaching Class A :
PPP Project Preparation

Key Discussants:
1. Director of Project Develpoment and Advisory
PT. Sarana Multi Infrastruktur (Persero)

2. Head of Sub-Directorate of Public Private Partnership Preparation
DG BFRM-MoF
Coaching Class B :
The Investment Opportunity in Indonesia PPP Projects

Key Discussants:
1. Deputy for Infrastructure
National Development Planning Agency

2. Deputy of Infrastructure Acceleration and Region Development
Coordinating Ministry of Economic Affairs

3. Acting Chief Executive Officer
Indonesia Infrastructure Guarantee Fund
Coaching Class C :
PPP Scheme As a Solution to Limited State Budget

Key Discussants:
1. Director of Government Support and Infrastructure Financing Management
DGBFRM-MoF

2. Head of Center for State Budget Policy
Fiscal Policy Office-MoF
16.00 – 16.30 Closing

GOVERNMENT SUPPORT AND FACILITIES FOR PPP PROJECT IN INDONESIA



INTRODUCTION

Infrastructure development is needed to accelerate economic growth, improve social welfare and provide better public services. The involvement of the private sector in infrastructure development will create better public services and innovation. In this regard, the Government of Indonesia is introducing Public-Private Partnership (PPP) in infrastructure provision to allow the government to cooperate with the private sector based on the principle of proportional allocation of risks. The implementation of this scheme is regulated in Presidential Regulation No. 38 of 2015.

To support the implementation of PPP in Indonesia, the Ministry of Finance administer an innovative infrastructure financing through the provision of various facilities and fiscal support for projects with PPP scheme. In order to support the implementation of PPP scheme and rise new projects that focus on public services, the Ministry of Finance established the Directorate of Government Support and Infrastructure Financing Management whitin the Directorate General of Budget Financing and Risk Management.

This support is the manifestation of the Government efforts to support and fortify the development of infrastructure by bridging the private sector excellence and public sector eminence for the improvement of life quality of people of Indonesia.


PPP BUSINESS PROCESS

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PROJECT DEVELOPMENT FACILITY

Project Development Facility (PDF) is a facility provided by the Ministry of Finance to help GCA to prepare pre-feasibility study, bidding documents, and assist the GCA in the PPP project transaction until the project reaches the financial close.

Benefits

Helps GCA to prepare pre-feasibility study and bidding documents in a professional manner in order to attract the private sector to participate in PPP Projects.

Assists GCA in PPP project transaction until the project reaches the financial close.

Aligning the provision of facilities by the Minister of Finance for PPP Project in a series of processes that runs effectively and efficiently.

Types of Facility


Project Preparation


● Preparation of final business case (FBC)

● Preparation of studies and/ or supporting documents for FBC


Transaction Advisory Facility


● The procurement of project company

● Signing of the PPP agreement

● Signing of the PPP agreement

Project Criteria


PPP project that can get this facility is a project that has met all criteria and requirements set out in President Regulation No. 75 of 2014.


PPP project besides those that have been designated as priority projects can also get this facility on the condition that the relevant GCA has done Market Sounding indicating that the project is gaining interest from investors.

PDF Provision Business Process

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Facility Implementation

DGSIFM acts as the implementer of PDF. Nevertheless, in consideration of efficiency and effectiveness, the Minister of Finance can give a special assignment to State-owned Enterprise (SOE) and/ or cooperating with an international institution to implement PDF.

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1. DGSIFM and GCA sign the facility implementation agreement
2. Minister of Finance releases the assignment letter for the SOE regarding the implementation
3. DGSIFM and SOE sign the agreement of SOE assignment
4. GCA and assigned SOE sign the the facility implementation agreement

Legal Basis

The legal basis for PDF in Indonesia is based on:
● Presidential Regulation No. 75 of 2014 on Acceleration of Prioritized Infrastructure Provision
● Minister of Finance Regulation No. 265/PMK.08/2015 on Facilities for the Project Preparation and Transaction Advisory of PPP Projects.
● Minister of Finance Regulation No. 129/PMK.011/2016 on Amendment of Minister of Finance Regulation No. 265/PMK.08/2015


VIABILITY GAP FUND

Viability Gap Fund or VGF is a government support in the form of contribution of some of the construction cost, given in cash to a PPP project that already economically viable but has not had a financial feasibility. VGF can be given when there is no other alternative to make the PPP project financially feasible. Local Government can contribute to the provision of this support after obtaining the approval of Local Parliament.

Benefits

Reduces the project cost to be borne by private parties.

Increases the financial feasibility of PPP projects that attract interest and participation of the private sector.

Increases the certainty of the procurement of project company in accordance with the quality and the planned timeline

Delivers public service at an affordable tariff for the community.

Project Criteria

PPP Project that can be granted with VGF is a project that:



Has met the economic viability but has not met the financial feasibility.

Implements the user pay principle.

Has a total investment cost not less than IDR 100 billion.

Held by a project company which obtained through open and competitive bidding process

Had the scheme of assets transfer and/ or transfer of assets management from the project company to the GCA at the end of the period of cooperation.

Had prepared a comprehensive pre-feasibility study:
● Lists the optimal risk sharing
● Has concluded that the project is feasible in terms of technical, legal, environmental, and social aspects;
● Shows that the PPP project becomes financially feasible with the support.

Granting Procedure


VGF In Principle Approval

GCA submits a proposal for VGF in principle approval (UPPDK) to the Minister of Finance after completing the OBC before implementing Pre-qualification


VGF Cap Amount Approval

GCA submits the proposal for VGF Cap Ammount Approval to Minister of Finance after conducting the pre-qualification and prior to stage the Request for proposal (RFP).


VGF Final Approval

GCA submits the proposal for VGF Final Approval (UPFDK) to the Minister of Finance after awarding the winning bidder.


VGF Letter

GCA submits the report of project company establishment and the plan of PPP agreement signing to Minister of Finance.

Disbursement

VGF is disbursed to be given to the project company by installments. There are two alternatives of the disbursement that can be done:



During the construction
In accordance with the stage of completion of the project construction, which has been agreed in the PPP agreement.

After the commercial operation date as agreed in the PPP agreement

Disbursement Process

Supporting Documents for VGF:
1. PPP Agreement
2. VGF Letter
3. Summary of VGF Terms & Conditions
4. Verified proof of performance achievement
5. GCA’s approval of verification result
6. Statement from the project company that achievement of the performance is correct and accountable

Legal Basis

The legal basis for Viability Gap Fund in Indonesia is based on:
● Presidenetial Regulation No. 38 of 2015 on Public-Private Partnership in Infrastructure Provision
● Minister of Finance Regulation No. 223/PMK.011/2012 on Provision of Viability Gap Fund
● Minister of Finance Regulation No. 143/PMK.011/2013 on Guidance of Provision of Viability Gap Fund
● Minister of Finance Regulation No. 170/PMK.08/2015 on the Amendment of Minister of Finance Regulation 143/PMK.011/2013
● Minister of Finance Decree No. 340/KMK.011/2013 on Establishment of the VGF Committee
● Minister of Finance Decree No. 782/KMK.08/2015 on the Amendment of Minister of Finance Decree No. 340/KMK.011/2013


INFRASTRUCTURE GUARANTEE

Infrastructure guarantee is a guarantee given on GCA’s financial obligation to pay compensation to the project company in the occurence of infrastructure risks which has become GCA’s responsibility based on risk allocations agreed in the PPP agreement. Infrastructure guarantee is implemented by IIGF as a single window policy. If the guarantee coverage exceeds the capacity of the IIGF, it will be carried out as co-guarantee by the Ministry of Finance and IIGF.

Benefits

Ensures financial close successfulness as well as potential improvement in tenor, interest, and/or financing terms

Ensures GCA’s performance to meet its obligations

Enhance the investor’s and lender’s confidence and comforts

Project Criteria

PPP project that eligible to get the guarantee are:



Comply with the rules stated in Presidential Regulation No.38 of 2015

Comply with the sectoral regulations and through a transparent and competitive bidding process

Feasible in terms of technical, economical, legal, environmental, and has no negative impact on social aspects

Perform the feasibility sstudy by using the services of independent and professional consultant

Have binding arbitration provisions in the PPP agreement

Infrastructure Guarantee Business Process

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Legal Basis

The legal basis for infrastructure assurance facility in Indonesia is based on:
● Presidential Regulation No. 78 of 2010 on Infrastructure Guarantee Facility of PPP Projects that’s Conducted Through Infrastructure Guarantee Fund
● Minister of Finance Regulation No.260/PMK.011/2010 on Implementation Guidelines of Infrastructure Guarantee in Public-Private Partnership
● Minister of Finance Regulation No. 8/PMK.08/2016 on The Amendment of Regulation No. 260/PMK.011/2010


AVAILABILITY PAYMENT (AP)

Availability Payment is a periodic payment by the Minister / Chairman of the Institution / Head of the Region to enterprise for providing infrastructure services that conforms the quality and/ or criteria as specified in the PPP agreement.

Benefits

The government is not burdened with the cost of infrastructure projects construction

The certainty of a return on investment for the project company

Project Company doesn’t have to endure demand risk

PLanning

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Preparation

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