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Financing Infrastructure Development 2015-2019

Increasing the significant role of SOE & Private Sector through PPP and PINA Schemes

Private Participati

on:

US$ 131.1Bn

(36.5%)

Total Value of

Investment Required

in Infrastructure*2015-

2019:

US$

359.2Bn (IDR

4,796.2Tn)

SOE :

US$ 79.8Bn

(22.2%)

Government Budget:

US$ 148.2Bn

(41.3%)

Investment Value

(Sources)

Source: BAPPENAS Internal Analysis

Weighted Average Cost of Capital (WACC)

• Social security;

• Education security;

• Health security.

• Drinking water material;

• Mass public transportation.

• Toll roads; • Ports.

Investment that does not possess direct investment feedback to the object.

Investment which is economically viable but less financially viable hence needing additional Government support.

Investment which is economically and financially viable but seen as less attractive or risky hence Government intervention is needed.

Investment which is more attractive hence the Government’s role in regulating and promoting is minimized.

• Electricity;

• Airports; • Gas pipe.

Definition

Example

Source of Funding

Category

Public Investment: Provision of Public Facilities

IRR low high

Government funding (APBN & APBD)

Government funding + commercial funding

Commercial funding promoted by the Government

Commercial funding

PINA

Social Investment PPP Special Commercial

Investment General Commercial

Investment

*) 1 : Calculation based on infrastructure investment (required) to be a middle income country by 2025. Source: Bappenas- JICA, 2014: Background Study for RPJMN 2015-2019, Analyst team of Ministry of National Development Planning (BAPPENAS) RPJMN: National Medium-Term Development Planning

PPP

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Indonesian Government Facilities in PPP Scheme

GCA

PPP Project Special Purpose

Company

Equity Sponso

r

Financi

er

DEBT EQUITY

USER

Infrastructure services PPP

CONTRACT

User Fee Availability Payment

• Project Development Fund.

• Viability Gap Fund.

• Government Guarantee by IIGF.

• Infrastructure Financing and Fund by (PT. SMI and IIF).

GOVERNMENT FACILITIES

• Tariff (User fee). • Availability Payment. • Other Legal Forms.

COST RECOVERY SCHEME

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19 Sectors Covered for PPP in Indonesia

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CONNECTIVITY Road Toll Roads Toll Bridges Roads

URBAN INFRASTRUCTUR

E

SOCIAL INFRASTRUCTUR

E

Transportation Seaports Airports Railways Road

transportation Electricity Power plants Transmission

Energy

conservation Street lighting

Telecommunic

ation &

Informatics Fiber optics E-government Satellite

Water supply

Waste

management

system Water

resources &

irrigation

Localized

waste water

management

Centralized

waste water

management

Public housing

Urban facility Traditional

market

Tourism

Education

facilities

Sports, art &

culture

facilities

Health

Zone/ Estates

Penitentiary

Oil, Gas, and

Renewable

energy

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1. Yogya - Bawen Toll Road

2. Surakarta Street Lighting

3. Multifunction Satellite

4. National Integrated Welfare System

5. Indonesia National Cancer Center Dharmais Hospital

6. Nusakambangan Industrial Correctional Facility

7. Correctional Facility Relocation (Ciangir)

1. Semarang – Demak Toll Road

2. Surabaya - Madura Toll Bridge

3. Medan Municipal Transport (LRT)

4. Pekanbaru Regional Water Supply

5. University of Sam Ratulangi Teaching Hospital

6. Sidoarjo General Hospital

7. Pirngadi Hospital

1. Manado - Bitung Toll Road

2. Balikpapan -Samarinda Toll Road

3. Pandaan - Malang Toll Road

4. Batang - Semarang Toll Road

5. Serpong - Balaraja Toll Road

6. Umbulan Water Supply

7. Central Java Power Plant

8. West Palapa Ring 9. Central Palapa Ring 10. East Palapa Ring

Preliminary study

Outline Business Case (OBC)

Final Business Case (FBC)

PQ Request for

Proposal Bid Award PPP

Agreement Signing

Financial Close

Tender Preparation

1. Serang -Panimbang Toll Road (Government side 33 km)

2. West Semarang Water Supply

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PPP Project Pipeline

11 projects

1. Jakarta -Cikampek South Toll Road

2. Probowangi Toll Road

3. Cisumdawu Toll Road

4. Serang -Panimbang Toll Road (PPP 51 km)

5. Bandar Lampung Water Supply

6. Nambo Regional Waste Management

TOTAL: US$ 4.1 billion TOTAL: US$ 4.2 billion TOTAL: US$ 7.8

billion

PLANN

ING

PREPARATION TRANSACTION

CONSTRUCTION

.

Financi

al

Close

Constructi

on

Project proponent

submits

a proposal and

pre-FS

document to GCA

• Pre-FS document

evaluation to get pre-

FS approval;

• GCA gives the rights

to project proponent

to prepare FS

Business Entity

submits FS FS evaluation Procurement

PPP

Agreement

Signing

Issuing approval letter:

1. Establishing the

project as an

Unsolicited Project;

2. Establishing the

business entity as

the project initiator.

Jatiluhur Water Supply (US$ 0.1 billion)

1. Karian Water Supply

2. TOD Poris Plawad

Pri

vate

as

the

pro

ject

inn

itia

tor

(UN

SOLI

CIT

ED)

1. Krian - Legundi - Bunder - Manyar Toll Road (US$ 0.9 billion)

2. Jakarta - Cikampek Elevated II Toll Road (US$ 1.3 billion)

Go

vern

men

t as

th

e p

roje

ct in

nit

iato

r (S

OLI

CIT

ED)

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PINA Plays a Major Role in Infrastructure Development in Indonesia

Facilitation Function

Facilitation Function 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.

Pipelining 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.

Ecosystem Function Create investment ecosystem which can encourage increased investment in Indonesia: Assesment of investment regulations, policy

recommendation and relaxation. Accelerate implementation of creative financing

instruments: • Discretionary funds (RDPT Equity) Perpetuity Notes, Asset

Backed Securities, Callable Preferred Stock, Securitization and LCS.

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How PINA Facilitates Investors in Equity Financing

Enhancing the Equity Participation by Deepening Capital Markets

Direct Equity Financing Direct equity

participation in an infrastructure company (investment platform)

Equity investment Investor purchases

equity instruments issued by infrastructure company (investment platform) such as discretionary funds, perpetuity notes, and callable preferred stocks or other near-equity related instruments

deepening capital markets

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PINA Projects Pipeline

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1

3

2 PT PJB – Power Plants (2 Projects) (IDR 14.5 trillion / USD 1,071 million)

BIJB (Development Stage 2 and Aerocity – 2 Projects) (IDR 30.0 trillion / USD 2,237 million)

Waskita Toll Road – Trans Java and Non-Trans Java Toll Road (18 Projects) (IDR 135.0 trillion/ USD 10,000 million)

4

6

5 PT RAI – R-80 Airplane (IDR 21.6 trillion / USD 1,600 million)

PT PLN – Power Transmission (IDR 27.5 trillion / USD 2,040 million)

3

6

2

2 2

1

5 1 4

3 3

3

Flores Prosperindo, Ltd. – Area Development Flores Island (IDR 13.5 trillion /USD 1,000 million)

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PINA encourages a better investment climate in Indonesia PINA pushes several new rules and regulations that improves

investment appetite

Regulation Advocacy

Coordinate with OJK, Indonesian Financial Services Authority, to relax the regulations & issue the new investment instrument(s);

Coordinate with IAI, Indonesian Accounting Association for aligning of financial recording rules.

Socialization & Coordination

Continues to hold PINA socialization forum with various stakeholders (PINA Day);

Coordinate with various related associations that have potential of becoming investees or investors.

Improvement of Governance &

Regulation Develop strategic plan

and good governance guidelines of PINA;

Conducting related research and studies to strengthen the functions and roles of PINA in investment funding schemes.

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Contact us

PINA Center for Private Investment Ministry of National Development Planning / BAPPENAS Jalan Taman Suropati 2, Menteng Jakarta Pusat, Indonesia 10310 Tel: +62-21-3903916 Email : info@pina.bappenas.go.id

Coordination

Facilitation

Capacity Building

Accelerating PPP Implementation

in Indonesia

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