Seminar PT LEN

Diskusi SPV (Special Purposed Vehicle) dan Investasi Business

Bandung, 07 February 2019

Leny Maryouri, ST. MEngSc. PhD.

Lingkup pembahaan

National Infrastructure Projects

PPP Policy Framework
Tahapan PPP
Financing Scheme
 Project Pipelines for Infrastructure

Source: KPPIP, March 2018

 concerning National Strategic
Presidential Regulation No. 58/2017 Projects

245 Projects and

2 Programs with
estimated total
investment of
US$327.2
Billion
PROJECTS
PROGRA

Note: The investment value is based on the updates per October 2017. The data
MS

on investment value is under verification process with The Executive Office of

President (KSP) and Indonesia's National Government Internal Auditor (BPKP)

Source: KPPIP, March 2018

 PSN Development Involves Various Funding
Scheme NUMBER OF PROJECTS BASED ON FUNDING
SCHEME
National or Regional State Budget: 96 Projects
"100% funding from government fiscal budget“

SOE Assignment: 33 Projects

"Internal SOE financial capacity, with additional capital injection from state
budget if necessary“

SOE or Regional-SOE: 11 Projects

"Internal SOE/R-SOE fiscal capacity"

Public Private Partnership: 58 Projects

"Private funding with additional government fiscal support to improve project
feasibility in form of viability gap fund or availability payment"

Private: 36 Projects
"Private funding without government fiscal support"

Combination: 6Projects
"Combination of funding scheme explained above"

Undecided: 7 Projects
"Funding scheme is not yet determined"

Source: KPPIP, March 2018

 Opportunity to Contribute of The Total PSN
0% PSN Investment Value
PSN requires funding from various sources,
including state budget, SOEs/R-SOEs, and private

SOEs/RSOEs Estimated required funding1for PSN of 245 Projects + 2 Program:

30%

Privat…

State
Budg…

1Exclude 16 projects which investment value is still unknown

Exchange rate: US$ 1 = IDR 13,000

Source: KPPIP, March 2018

 Funding Allocation Plan for 245 Projects + 2
Programs :
Infrastructure Funding Requirement of
Source of Fund (USD RPJMN 2015-2019 Funding Realization Percentage
1,2 PSN Total
Million) Funding Requirement ≤2016 (%)
2017 2018 2019 ≥2020
1. State/Regional Budget 152,154 5,997 4,502 4,591 4,130 21,184 40,404 13%
2. SOEs 82,000 6,797 8,898 12,351 17,924 50,818 96,788 30%
3. Private 134,692 26,119 16,229 26,845 26,151 90,280 185,625 57%
TOTAL 368,846 38,914 29,629 43,786 48,205 162,282 322,816 100%

1 Excluding18 projects, which the investment value are still unknown: smelter, housing, Special Economic Zone, and Road
2 Fund of USD18,037 Million (CAPEX and OPEX) from 24 projects that has no information regarding its annual allocation
requirements, are grouped into ≥2020

Assumptions on the grouping of funding allocations:

1. For projects with PPP scheme but has no information of the State/Regional Budget allocation, the total funds are
allocated in Private
2. For projects with SOE Assignment but has no information of the State/Regional Budget allocation, the total funds are
allocated in SOEs

Source: KPPIP, March 2018

 Accumulation Progress Status for 245 Projects + 2
Programs :

Source: KPPIP, March 2018

 Various Facilities Through Some Reforms
FISCAL
Viability Gap Funding (VGF)
Increase project financial feasibility by
contributing up to 49% of the construction
cost. (MoFReg. No. 223/2012)
Availability Payment (AP)
Issuance ofregulatory framework to
allowannuity payment by the Gov’t during
concession period to concessionaire since
project operation based on infrastructure
service availability. (MoF Reg. No.
190/2015 for Central Gov’t and MoHA
Reg. No. 96/2016 for RegionalGov’t)
Land Revolving Fund
A revolving-fund sourced from State Budget,
to accelerate land acquisition. (MoF
Regulation No. 220/2010)
Project Development Fund (PDF)
The implementation of PPP funding scheme
is still limited due to the unavailability of
expertise and special funding as required
for high quality project preparation needed
for the success of PPP projects.
INSTITUTIONAL REFORM
KPPIP
KPPIP is actively involved in accelerating delivery of
priority infrastructure projects
PT Sarana Multi Infrastruktur
Merging betweenPT SMI and Gov’t Investment Center
(PIP) to become an infrastructure funding company.
BLU LMAN
The State Asset Management Agency (BLU LMAN) is
mandated to provide land fund for National Strategic
Projects to ensure timely land acquisition process
REGULATORY REFORM
Direct Lending
Allow guarantee for direct lending to SOE to accelerate
financial close process for infrastructure projects.
(Presidential Reg. No. 82/2015.)
PT Indonesia Infrastructure Finance (IIF)
IIF provides capital for infrastructure development and
support the GCA in the preparation and transaction
stages for PPP projects).
PPP Unit
Provide facilities to help GCA on preparing PPP project
(PDF/TA)
Indonesia Infrastructure Guarantee Fund
(IIGF)
IIGF has thepotential to provide project guarantee for
non-PPP projects.
Land Acquisition
Stipulate land acquisition acceleration based on Law
No. 2/2012. (Presidential Reg. No. 148/2015)
15 Economy Packages
Conduct deregulation for issues hindering infrastructure
delivery and develop a task force under CMEA to ensure
the implementation’s effectiveness of Economy Packages.
 Various Facilities Along All Phases of The Project Delivery Life
Cycle

Source: KPPIP, March 2018

 Infrastructure Funding (2015 –2019)

Source: Bappenas. “Framework of Infrastructure Development in Indonesia”. 2017

Principal Differences of Government, Corporate and Project Financing
 Infrastructure Funding Paradigm

Source: Bappenas. “Framework of Infrastructure Development in Indonesia”. 2017

14 Posisi Feasibility Study (dalam tahapan KPBU)
 19 Sector Covered for PPP in Infrastructure

Source: Ministry of National Development Planning (Bappenas), 2017

 Public Private Partnership (PPP) Scheme in
Infrastructure

Source: Ministry of National Development Planning (Bappenas), 2014

 PPP Scheme in Indonesia
Indonesia’s Government has successfully implemented 6 schemes as benchmarks for future PPP projects

Source: Ministry of National Development Planning (Bappenas), 2014

 Potential Source of Funding in PPP
Banking Industry as the biggest pool still has its own limitation.

US$ 131 Bn US$ 358 Bn

PRIVATE
SECTOR
36.5%
US$ 80  225 National Strategic
Bn Project
US$ 148 SOE 22.2%  30 National Priority Project
INVESTMEN
Bn  Social Infrastructure Project
T TARGET
 Others
2015-2019
APBN/
APBD
41.3%

*) Based on McKinsey Study on IIGF Long-term Strategy Assignment

Source: IIGF, 2017

 Viability Gap Funds (VGF)
Viability Gap Funds 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
1. Reduces the project cost to be borne by private parties;
2. Increases the financial feasibility of PPP projects that
attract interest and participation of the private sector;
3. Increases the certainty of the procurement of project
company in accordance with the quality and the planned
timeline;
4. Delivers public service at an affordable tariff for the
community.
Source: http://www.djppr.kemenkeu.go.id/ppp .2018
1. PROJECT
Has met the CRITERIA
economic viability but has not met the financial
feasibility;
2. Implements the user pay principle;
3. Has a total investment cost not less than IDR 100 billion;
4. Held by a project company which obtained through open and
competitive bidding process;
5. 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;
6. 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.
 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.nt.”

 Public Sponsor makes periodic payments to Private Partner

 Return on equity reflects level of transferred risk
 Private Partner finances (debt and equity) against payment
BENEFITS stream

1. The government is not burdened with the cost of

infrastructure projects construction;
2. The certainty of a return on investment for the project
company;
3. Project Company doesn’t have to endure demand risk

Source: http://www.djppr.kemenkeu.go.id/ppp .2018

 PINA Played a Major Role in Infrastructure Development in
Indonesia
 Bring projects to financial close stage.
 Provide suggestions on project financing structure in
collaboration with PT SMI & PT IIF.
 Promote projects pipeline through international
roadshows and one-on-one meetings.
Facilitation Function

 Prepare list of projects that are ready to be offered to investors

and list of potential investors who will invest.
 Provide the latest information updates of projects to investors. Ministry of PPN /
Pipelining Function BAPPENAS
through the PINA
Center for Private
 Create investment ecosystem which can encourage increased investment in Investment Team
Indonesia:
conducts 3 (three)
 Assesment of investment regulations and policy recommendation and relaxation.
 Accelerate implementation of creative financing instruments: Discretionary funds main functions in
(RDPT Equity) Perpetuity Notes, Asset Backed Securities, Securitization and LCS. optimizing PINA
Ecosystem Function scheme

Source: Ministry of National Development Planning (Bappenas), 2017

 Potential of Capital Gain at Investment Recycle
Stage

Source: Ministry of National Development Planning (Bappenas), 2017

 Summary
Public-Private Partnership Regulations in Infrastructure
Provision

Source: Ministry of National Development Planning (Bappenas), 2017