Presented in:Indonesia 2013 Investment SummitConrad Hong Kong, October 21-23, 2013

By: Eddy SatriyaHead of International Cooperation Division

Secretariat of KPE3I

COMMITTEE FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT

KP3EI

1

Accelerating Indonesia’s EconomicTransformation Through MP3EI

Synergy in Resources, Power andInfrastructure

OUTLINE:KP3EI

1. MP3EI: The Way We Are

2. MP3EI Updates

3. Capitalizing on Mining Sector to Support

Infrastructures Development

4. Debottlenecking Initiatives and Priority Projects

ScreeningCommittee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

1.MP3EI: The Way We Are1.MP3EI: The Way We Are

KP3EI

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

Before, Now, and Then……!!!(China , America, and Indonesia)

China constructs Bridges

What can Indonesia do???

America exports Chopsticks

Rich Natural Resourcesmost of them are still intact to be processed into higher VA products

Natural Gas Thermal Coal Geothermal Palm Oil Cocoa Tin Nickel Bauxite FrequencySpectrum

KeyMetrics

About 165TCF of

reserves atproductionrate ± 3 TCF

pa

Worldsecondlargest

exporter

Home of40% ofworld’s

resources(the largest

in theworld)

World’slargest

exporter;>19 miltons per

year

At 770 thoutons/year,world’s 2nd

largestproducer

At 65 thoutons/year,world’s 2nd

largestproducer

Own ± 12%of world’sreserves

(4th largest)

World’s 7th

largestreserves;

world’s 4th

largestproduction

700 MHzoutside

Java,Potential

arrangement for Java

area

2300-2360MHz urbannationwide

About 40% is assumedfeasible. Up to now, 1.200MW has been developed.

Will be at least partiallyprocessed

domestically by 2013(new mining law:

4/2009)

• Abundant resources forgas-based energy andpetrochemical industries

• Not including Non-Conventional Gases,from Coal Bed Methaneand Coal Gassification

5

6

Indonesia’s Population is Growing and BecomingMore Affluent

74mill

141mill

7

All of Indonesia’s MAC Population is Growing,There is a valid concern that economic domination of

Java and Sumatra need to reduced in the long run

Slide - 8

Note: MAC (Middle-class and Affluent Consumer)

Increase economic precense at the regional economic centers is inevitable not only tomaintain market penetration but more to foster enhanced economic competitiveness and

resilience

Increase economic precense at the regional economic centers is inevitable not only tomaintain market penetration but more to foster enhanced economic competitiveness and

resilience8

Political Stability: the world’s third largest democracy

Appointed

Appointed38%

Directlyelected

Directlyelected

62%

0%

20%

40%

60%

80%

100%

2002 2007 2009Source: World Bank, 2009

% of appointed local government heads vs. directly elected

In election year 2009, President wins

more than 60% votes from 176 millionregistered voters

(election year 2009)

9

(New) DemocracyYES!Just Recently (20 Sept2012)

An humble Major fromsmall city Solo in CentralJava, JOKO WIDODOpaired with AHOK fromBelitung (Sumatera),unsurprisingly won themost prestigious positionas DKI Jaya - Jakartagovernors.

Courtesy of Antara10

Indonesia is above world average… Indonesia >100(above world mobile average)

11

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*

Per

100

inha

bita

nts

Global ICT developments, 2001-2011*

Mobile-cellular telephone subscriptions

Internet users

Fixed telephone lines

Active mobile-broadband subscriptions

Fixed (wired)-broadband subscriptions

* Estimate.Source: ITU World Telecommunication /ICT Indicators database

11

2010 2011 2012

TARGETRPJM REALIZATION TARGET

RPJM REALIZATION TARGET RPJM REALIZATION*)

Economic Growth 5,5- 5,6 6,2 6,0 - 6,3 6,5 6,4 - 6,9 6,23Inflation 4 - 6 7 4,0 - 6,0 3,8 4,0 - 6,0 4,30Unemployment 7,6 7,1 7,3 - 7,4 6,6 6,7 - 7,0 6,14 (Agt)Poverty 12,0 - 13,5 13,33 11,5 - 12,5 12,49 10,5 - 11,5 11,66 (Sept)

When Realizations meet TargetsWhen Realizations meet Targets

2013 2014STATUSTARGET

RPJMTARGET

APBN 2013TARGET

RPJMTARGET

RKP

Economic Growth 6,7 - 7,4 6,8 7,0%-7,7% 6,8 – 7,2Inflation 3,5 – 5,5 4,9 3,5 – 5,5 4,5 + 1Unemployment 6,0 - 6,6 5,8 – 6,1 5%-6% 5,0 – 6,0Poverty 9,5 - 10,5 9,5 – 10,5 8%-10% 8,0 – 10,0

1 On Track/on Trend 2 =Need Efforts

2

1

1

2*) Tentaive figureSource: Bappenas 2013 12

Indonesia’s GDP Growth Rate 1994 - 2012Relatively robust, but still lower than pre-1997 crisis average rate

7,54 8,22 7,824,70

-13,13

0,79

4,923,64 4,50 4,78 5,03 5,69 5,50 6,35 6,01

4,586,20 6,46 6,23

-15

-10

-5

0

5

10

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(% YoY)

Source: Indonesia Statistic

Impact of 2008’sglobal financial crisis.

Impact of 1997’sAsian financial crisis.

2001 - 2006: 5 %1994 - 1997 : 7,1 % 2007 - 2012: 6 %

During pre-Asian crisis (1994-1997), the economy grew at an annual average rate of 7.1%, andwas named an 'Asian Tiger' by the World Bank along with South Korea and Thailand.

After Asian Crisis (2001-2006); Indonesia’s average annual GDP growth rate was 5%. From 2007-2012; Indonesia’s average annual GDP growth rate was 6 %. If this can be raised to

7% over the next 20 years, we believe Indonesia will be among the world’s 12 biggesteconomies by 2025, and the 6 biggest economies by 2050. Mc Kinsey Global Institute predictsIndonesia will be the 7th-largest economy in the world in 2030. Standard Chartered GlobalResearch predicts Indonesia will be the world’s 10 largest economies in 2020, and the top six in2030.

~6.02013

13

Key Economics Stabilization Achievement:Consistently Reduced Poverty and Unemployment Rate

Indonesia’s robust average GDP growth of 6.2% over the past six years has reduced theunemployment rate to 6.15% of the total labour force in September 2012 from 11.2% in2005.

In September 2012 the poverty rate dropped significantly to 11.66% of the totalpopulation from 17.75% in 2006.

36,1

0

35,1

0

39,3

0

37,1

7

34,9

6

32,5

3

31,0

2

30,0

2

28,5

9

16,66 15,9717,75

16,5815,42

14,1513,33

12,49 11,66

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

18,00

20,00

5

10

15

20

25

30

35

40

45

50

2004 2005 2006 2007 2008 2009 2010 2011 2012

poverty (million lives) poverty rate ( % of total population)

Source: Indonesia statistic

10.2

5

11.9

0

10.9

3

10.0

1

9.39

8.96

8.32

7.70

7.24

9,86

11,2410,28

9,118,39 7,87

7,146,56 6,14

-1

1

3

5

7

9

11

13

2,00

4,00

6,00

8,00

10,00

12,00

14,00

2004 2005 2006 2007 2008 2009 2010 2011 2012

unemployment (million people) unemployment rate (%)

Source: Indonesia statistic

unemployment rate poverty rate

14

THE PROJECTED NATIONAL GDP STRUCTURE 2025(BY ECONOMIC CORRIDOR)

NATIONAL GDP TARGET 2025US$ 4.000 – 4.500 billions

FROM 23.8% 27From US$ 217 b US$ 1114 b

FROM 2.1% 3.5%From US$ 19 b US$ 144 b

FROM 4.8% 6%From US$ 44 b US$ 248 b

FROM 2.5% 3.5%From US$ 23 b US$ 144 b

FROM 9.3% 11%From US$ 85 b US$ 454 b

FROM 9.3% 11%From US$ 520 b US$ 2021 b

15

Indonesia Economic Corridors: Masterplan

Basically MP3EI is based on thesestrategic initiatives:1. Encourage a large scale investment

realization in 22 main economicactivities

2. Synchronization of national action planto revitalize the real sectorperformance

3. The development of center ofexcellence in 6 (six) economiccorridors

Main strategy of MP3EI:1. Economic potential development

through economic corridor2. Strengthening the national connectivity3. Strengthening national human

resources capability and science andtechnology

16

With AEC and APEC integration around the corner, Readiness ofEastern Part of Indonesia is the Main Concern Indonesia

17

Strategic Focus Areas to Boost Reg. Development

1818

MP3EI aims at accelerating Indonesia’s economic transformation throughcross-entity synergy and collaboration

MP3EI aims at accelerating Indonesia’s economic transformation throughcross-entity synergy and collaboration

2010GDP ~ US$ 700 B

GDP/c US$ 3,00517th major nation

2010GDP ~ US$ 700 B

GDP/c US$ 3,00517th major nation

2014GDP: US$ ~ 1,2

T

GDP/c:US$ ~ 4.80014 majoreconomy

2014GDP: US$ ~ 1,2

T

GDP/c:US$ ~ 4.80014 majoreconomy

2025GDP: US$ 3,8 –4,5T

GDP/c:13.000 – 16.100US$12 high incomecountry

2025GDP: US$ 3,8 –4,5T

GDP/c:13.000 – 16.100US$12 high incomecountry

1

2

3

Developing economic potential through economiccorridors

Strengthening national human resourcescapability and science & technology

Strengthening national connectivity

• Coordinating Ministry of Economic Affairs, NationalDevelopment and Planning Agency, Ministry of Finance,Ministry of Public Works, Ministry of Transportation,Ministry of Forestry, Ministry of Energy and MineralResources (other relevant Ministries), Governors,Chamber of Commerce leaders, experts, business players

• 9 Working Groups: 3 Cross-sector Working Groups(Regulation, Connectivity, HR & Tech) and 6 WorkingGroups of Economic Corridors)

In creating economic transformation for Indonesia,MP3EI employs three pillars…In creating economic transformation for Indonesia,MP3EI employs three pillars…

… and revolves in the cross-entity efforts to ensuresound projects coordination, consisting of:… and revolves in the cross-entity efforts to ensuresound projects coordination, consisting of:

Chairman : PresidentVice Chairman: Vice President

DAILY IMPLEMENTATION TEAMChairman: Coordinating Minister of Economic AffairVice Chairman 1: Minister of National Dev Planning AgencyVice Chairman 2: Chairman of National Economic Committee

SECRETARIAT

JavaEC

Team

Sumatra

EC*Team

Sulawesi

ECTeam

KalimantanEC

Team

Bali-NTEC

Team

Papua-Kep.MalukuEC Team

REGULATIONWorking Group

CONNECTIVITYWorking Group

HR & TECHWorking Group

Note*ECEconomicCorridor

19

19

2. MP3EI Updates2. MP3EI Updates

KP3EI

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

MP3EI Updates:The Importance of MP3EI

21

Increasing Indonesia's Investment Attractiveness& Regional Based National Economic StrategiesIncreasing Indonesia's Investment Attractiveness& Regional Based National Economic Strategies

Triggered the urgency of SystematicTechnocracy to accommodate the increasingin Value-Added Economic Activities

Triggered the urgency of SystematicTechnocracy to accommodate the increasingin Value-Added Economic Activities

Ability to accommodate a quite effectivesystem for Synchronization and CoordinationAbility to accommodate a quite effectivesystem for Synchronization and Coordination

Provided fresh spirit and sense of hope for therealization of the well-being and developedinclusive society

Provided fresh spirit and sense of hope for therealization of the well-being and developedinclusive society

MP3EI

1

2

3

4

MP3EI Investment UpdatesPer July 2013

Rp. 4,482 TTotal Investment

Rp. 2,304 TInfrastructures

Investment

Rp. 2,178 TEconomic Activities

Investment22

MP3EI Investment Updates (2)Groundbreaked Projects

240Ground-breakedProjects:

647Trillion

RupiahsInvestment

283Trillion RupiahsInfrastructures

Projects

364Trillion Rupiahs

Real SectorsProjects

146 Projects146 Projects

94 Projects94 ProjectsInvestment updates as per July 2013

23

Infrastructure InvestmentsIncluding “KPI-Supporting Infrastructures” (in Billion Rupiahs)

per August 2013 24

INFRASTRUCTURES

MainInfrastructures

NationalBudget 61,646

SOE 512,971

Private 17,569

Mixed 322,105

KPI-Supporting

Infrastructures

NationalBudget 367,607

SOE 1,292,092

Private 679,118

Mixed 796,202

Actual percentage of GB 2011 based on the valueof the investment (not the number of projects)

Actual Groundbreaking Value based on investment (inTrillion Rupiah)

Papua - Maluku

Not yetAlready Groundbreaked

80100%

Bali - NT 40100%

Sulawesi 6418%

Kalimantan 2695% 5%

Jawa 17198%

Sumatera 9097% 3%

100%

TotalInvestment

411,63

MixedGovernment

77,14

94,46

Private

80,24

SOE

159,78

Sulawesi Economic Corridor has as many as 7 of the11 GB projects, but the projects that have not beenGroundbreaked worth quite large (in the mineralmining sector).

So far, 92% projects have been realized for the GB projectslist in 2011. Only in Sulawesi, the realization of the totalproject remaining 63% %

TotalInvestmentRp Triliun

37projects

42projects

22projects

10projects

111projects

25

6% 35,594%

100%

Bali - NT 4,437% 63%

Sulawesi 10,4100%

Kalimantan 99,3100%

Jawa 92,6100%

Sumatera 37,817% 83%

Papua - Maluku

Private

115,56

Mixed

13,07

SOE Government

42,00

41,65

TotalInvestments

212,28

These indicates high value projects that have not beengroundbreaked on Sumatera dn Papua-Kep.MalukuEconomic Corridors (Sumatra: toll roads, state-ownedinvestment on fertilizer; Papua: Freeport).

So far 81% have been realized for the GB projects in2012. Java and Sulawesi GB is 100%.

TotalInvestmentRp Triliun

20projects

28projects

21projects 4 projects 71

projects

Actual percentage of GB 2011 based on the valueof the investment (not the number of projects)

Actual Groundbreaking Value based on investment(in Trillion Rupiah)

26

Not yetAlready Groundbreaked

Economic Corridors

Total Projects Investment Value(Billion Rupiahs) Total

Infrastructure Real Sectors Infrastructure Real Sectors ProjectsInvestment

Value(Billion Rp.)

Sumatera 32 7 25.814,9 36.719,0 39 62.533,9

Jawa 13 31 74.840,0 40.934,0 44 115.774,0

Kalimantan 9 11 14.628,0 94.250,7 20 108.878,7

Sulawesi 9 7 7.880,0 2.858,0 16 10.738,0

Bali-NT 5 4 16.838,0 26.435,0 9 43.273,0

Papua-Kep.Maluku 14 4 3.085,0 201.480,0 18 204.565,0

Total 82 64 143.085,9 402.676,7 146 545.762,6

The project plan’s value will be very high, compared to 2012’s GB list, with investment value about twice from 2012.

* December 2012 27

Real Sectors Groundbreaking Matrix 2011 – Juli 2013SOE Private Government Mixed Total

TP Investment TP Investment TP Investment TP Investment TP Investment

Sumatra2011 6 2.956,13 7 9.532,99 0 - 1 50.600,00 14 63.089,122012 2 5.638,00 6 506,54 0 - 0 - 8 6.144,542013 1 6.247,03 0 - 0 - 0 - 1 6.247,03

TOTAL 9 14.841 13 10.040 - - 1 50.600 23 75.480,69

Jawa2011 6 18.569,65 14 19.040,61 - - 0 - 20 37.610,262012 0 - 8 9.953,00 0 - 0 - 8 9.953,002013 0 - 0 - - 0 - 0 -

TOTAL 6 18.570 22 28.994 - - - - 28 47.563,26

Kalimantan2011 4 5.216,00 6 4.038,95 0 - 1 4.500,00 11 13.754,952012 6 6.741,46 7 84.290,00 0 - 0 - 13 91.031,462013 1 4.400,00 1 1.200,00 0 - 0 - 2 5.600,00

TOTAL 11 16.357 14 89.529 - - 1 4.500 26 110.386,41

Sulawesi2011 1 4.500,00 4 6.692,00 0 - 1 735,70 6 11.927,702012 1 4.138,80 0 - 0 - 0 - 1 4.138,802013 0 - - - 0 - 0 - 0 -

TOTAL 2 8.639 4 6.692 - - 1 736 7 16.066,50

Bali - NT2011 0 - 4 32.252,00 0 - - - 4 32.252,002012 0 - 1 1.500,00 0 - 0 - 1 1.500,002013 0 - 0 - 0 - 0 -

TOTAL 0 0 5 33752 0 0 0 0 5 33.752,00

Papua - KepMaluku

2011 1 14.400,00 3 48.809,20 - - 1 18.000,00 5 81.209,202012 0 - 0 - 0 - 0 - 0 -2013 0 - 0 - 0 - 0 -

TOTAL 1 14.400 3 48.809 - - 1 18.000 5 81.209,20

Total Koridor

2011 18 45.641,78 38 120.365,75 0 - 4 73.835,70 60 239.843,232012 9 16.518,25 22 96.249,54 0 - 0 - 31 112.767,802013 2 10.647,03 1 1.200,00 0 - 0 - 3 11.847,03

TOTAL 29 72807,063 61 217815,289 0 0 4 73835,7 94 364.458,05

*TP= Total Projects28

SOE Private Government Mixed TotalTP Investment TP Investment TP Investment TP Investment TP Investment

Sumatra2011 7 8.983,40 0 - 2 3.834,00 11 15.332,00 20 28.149,402012 0 - 2 4.318,00 7 3.993,10 3 5.525,00 12 13.836,102013 0 -

TOTAL 7 8983,4 2 4318 9 7827,1 14 20857 32 41.985,50

Jawa2011 7 31.561,00 0 - 7 11.787,00 5 12.882,00 19 56.230,002012 4 41.201,00 2 6.687,00 4 29.200,00 3 10.185,00 13 87.273,002013 0 -

TOTAL 11 72762 2 6687 11 40987 8 23.067,00 32 143.503,00

Kalimantan2011 2 3.297,00 1 783,00 8 21.339,00 1 1.200,00 12 26.619,002012 1 350,00 0 - 10 4.791,00 2 1.557,00 13 6.698,002013 1 1.200,00 1 363,28 1 22.000,00 3 23.563,28

TOTAL 4 4847 1 783 19 26493,28 4 24757 28 56.880,28

Sulawesi2011 - - 0 - 9 3.399,00 0 - 9 3.399,002012 2 4.487,00 3 2.278,00 3 1.188,00 0 - 8 7.953,002013 0 -

TOTAL 2 4487 3 2278 12 4587 0 0 17 11.352,00

Bali - NT2011 5 3.382,00 0 10 6.163,00 0 15 9.545,002012 0 - 0 - 1 110,00 1 110,00 2 220,002013 0 -

TOTAL 5 3382 0 0 11 6273 1 110 17 9.765,00

Papua - KepMaluku

2011 1 2.500,00 0 - 15 12.534,92 1 500,00 17 15.534,922012 1 3.600,00 0 - 2 384,00 0 - 3 3.984,002013 0 -

TOTAL 2 6100 0 0 17 12918,92 1 500 20 19.518,92

Total Koridor

2011 22 49.723,40 1 783,00 51 59.056,92 18 29.914,00 92 139.477,322012 8 49.638,00 7 13.283,00 27 39.666,10 9 17.377,00 51 119.964,102013 1 1200 0 0 1 363,28 1 22000 3 23.563,28

TOTAL 31 100561,4 8 14066 79 99086,3 28 69291 146 283.004,70

Infrastructures Groundbreaking Matrix 2011 – Juli 2013

*TP= Total Projects29

SOE Private Government Mixed TotalTP Investment TP Investment TP Investment TP Investment JP Investasi

Sumatra2011 13 11.939,53 7 9.532,99 2 3.834,00 12 65.932,00 34 91.238,522012 2 5.638,00 8 4.824,54 7 3.993,10 3 5.525,00 20 19.980,642013 1 6247,026 0 0 0 0 0 0 1 6.247,03

TOTAL 16 23824,556 15 14357,529 9 7827,1 15 71457 55 117.466,19

Jawa2011 13 50.130,65 14 19.040,61 7 11.787,00 5 12.882,00 39 93.840,262012 4 41.201,00 10 16.640,00 4 29.200,00 3 10.185,00 21 97.226,002013 0 0 0 0 0 0 0 0 0 -

TOTAL 17 91331,65 24 35680,61 11 40987 8 23067 60 191.066,26

Kalimantan2011 6 8513 7 4.821,95 8 21.339,00 2 5.700,00 23 40.373,952012 7 7091,457 7 84.290,00 10 4.791,00 2 1.557,00 26 97.729,462013 2 5600 1 1200 1 363,28 1 22000 5 29.163,28

TOTAL 15 21204,457 15 90311,95 19 26493,28 5 29257 54 167.266,69

Sulawesi2011 1 4500 4 6.692,00 9 3.399,00 1 735,70 15 15.326,702012 3 8625,8 3 2.278,00 3 1.188,00 0 - 9 12.091,802013 0 0 0 0 0 0 0 0 0 -

TOTAL 4 13125,8 7 8970 12 4587 1 735,7 24 27.418,50

Bali - NT2011 5 3382 4 32.252,00 10 6.163,00 0 - 19 41.797,002012 0 0 1 1.500,00 1 110,00 1 110,00 3 1.720,002013 0 0 0 0 0 0 0 0 0 -

TOTAL 5 3382 5 33752 11 6273 1 110 22 43.517,00

Papua - KepMaluku

2011 2 16900 3 48.809,20 15 12.534,92 2 18.500,00 22 96.744,122012 1 3600 0 - 2 384,00 0 - 3 3.984,002013 0 0 0 0 0 0 0 0 0 -

TOTAL 3 20500 3 48809,2 17 12918,92 2 18.500,00 25 100.728,12

Total Koridor

2011 40 95.365,18 39 121.148,75 51 59.056,92 22 103.749,70 152 379.320,552012 17 66.156,25 29 109.532,54 27 39.666,10 9 17.377,00 82 232.731,902013 3 11847,026 1 1200 1 363,28 1 22000 6 35.410,31

TOTAL 60 173368,463 69 231881,289 79 99086,3 32 143126,7 240 647.462,75

TOTAL Groundbreaking Matrix 2011 – Juli 2013

*TP= Total Projects 30

KalimantanKalimantan

SumatraSumatra

JavaJava

Bali – NusaTenggaraBali – NusaTenggara

SulawesiSulawesiPapua-MalukuPapua-Maluku

SumatraInvestment

Value(US$ Mill)

Toll RoadsMedan–Binjai (15.8 km) 210.4Palembang–Indralaya (22 km) 179.6Pekanbaru–Kandis–Dumai (135 km) 1,529.9Bakauheni–Terbanggi Besar (150 km) 2,372.4Tebing Tinggi–Kisaran–Rantau Prapat (178 km) 1,396.2Panimbang–Serang (83 km)** 1,191.0Lubuk Pakam–Tebing Tinggi (43.5 km)* 707.8

SeaportsHub Kuala Tanjung 2,794.5Tanjung Sauh at Batam Not yet available

JavaInvestment

Value(US$ Mill)

Access Road to Purwakarta Industrial Area (7.8km)* 71.2Umbulan Water Supply* 211.3Cilamaya Port and Access Road (30km) 4,175.6Karawang Airport & Access Road 3,746.5Railway Madiun–Surabaya (165 km Double Track) 429.5Coal-Fired Power Plant Indramayu 4 (1 x 1000 MW)* 2,116.0

KalimantanInvestment

Value(US$ Mill)

Toll Road Balikpapan-Samarinda(99.02 km)

1,260.5

Purukcahu–Bangkuang–Mangkatip Railway (290 km)

2,277.0

Coal-Fired Power PlantAsamasam 5-6 (2x100 MW)*

331.2

SulawesiInvestment

Value(US$ Mill)

Road Palu–Parigi (37.4 km) 103.5

Toll Road Manado–Bitung (46 km) 353.1International Hub Bitung 3,208.4Railway Makassar–Pare-Pare (136.3km)*

621.0

Hydro Electric Power Plant Karama(4x112.5 MW)*

1,375.5

Bali-NTInvestment

Value(US$ Mill)

Water Supply South Bali** 282.2

Papua-MalukuInvestment

Value(US$ Mill)

Road Enarotali–Tiom (240 km)** 173.9

Notes: Blue-marked projects are potential PPP-projects. All projects are expected to groundbreak (GB) in 2017, except: *) GB in 2015 and **) GB in 2016

25 HIGH PRIORIT Y PROJECTS WILL BE READY FOR GROUNDBREAKING BETWEEN2015 AND 2017. 16 PROJECTS OF THESE PROJECTS HAVE POTENTIAL TO BE FUNDEDTHROUGH A PPP SCHEME.

31

MP3EI Enhancements

32

EnhancedMP3EI

EnhancedMP3EI

MaritimizationStrengthening themanagement of

marine resources,strengthening

connectivity, andstrengthening of the

National LogisticsSystem

MaritimizationStrengthening themanagement of

marine resources,strengthening

connectivity, andstrengthening of the

National LogisticsSystem

Natural-ResourceBalance Sheet

Optimization of potential ofnatural resources to

support the realization ofecological sustainability

Natural-ResourceBalance Sheet

Optimization of potential ofnatural resources to

support the realization ofecological sustainability

Strengthening ofEconomic SocietyWhere the economic

dimension will becamecornerstone in the

empirical process ofacceleration and

expansion of economiccorridor development

Strengthening ofEconomic SocietyWhere the economic

dimension will becamecornerstone in the

empirical process ofacceleration and

expansion of economiccorridor development

Enhanced Version of MP3EI are plannedto be released on APEC Summit 2013

Incorporating Sustainable Development IssuesInto MP3EI

Water (air)

Energy (energi)

Health (kesehatan)

Agriculture (pertanian)

Biodervisity (biodiversitas)

Indonesia's participation inthe World Summit onSustainable Development(WSSD) has demonstrated acommitment to achievesustainable economicdevelopment.

In practice, the WSSD hasprovided a WEHABframework that consists offive inherent aspect ofhuman life

33

3. Capitalizing on Mining Sector toSupport Infrastructures Development

3. Capitalizing on Mining Sector toSupport Infrastructures Development

KP3EI

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

Mining Sectors on MP3EIIncluded on 22 Main Economic ActivitiesMining Sectors on MP3EIIncluded on 22 Main Economic Activities

35

22 MainEconomicActivities

22 MainEconomicActivities

Oil&GasOil&Gas Ship

pingShipping Textil

esTextil

esFood

Beverage

FoodBeverag

e

SteelSteel

DefenseEquipm.DefenseEquipm.

PalmOil

PalmOil

Rubber

Rubber

CocoaCocoa

AnimalHusbandry

AnimalHusbandryTim

berTimber

TransportTransport

CoalCoalNickelNickel

Copper

Copper

Bauxite

Bauxite

Fisheries

Fisheries

Tourism

Tourism

FoodCropsFoodCrops

Metropolitan

JakartaArea

Metropolitan

JakartaArea

SundaStraitArea

SundaStraitArea

ICTICT• MP3EI sets a number of major

programs and the maineconomic activities focused ofdevelopment strategies andpolicies.

• This priority is a result of anumber of agreements thatare built together with allstakeholders in the discussionand dialogue series that areinteractive and participatory.

• Mining Sectors such as Steel,Coal, Nickel, Copper, Bauxiteare included on MP3EI’s 22Main Economic Activities.

MP3EI Impact on InfrastructureAnd Mining SectorsMP3EI Impact on InfrastructureAnd Mining Sectors

36*)Regulation such as Law No.4 year 2009, Government Regulation No. 27 year 2012, Government Regulation

No. 23 year 2010, and Minister of Energy and Mineral Resources’ Decree No. 7 year 2012

Role of Mining Sectors in MP3EIRole of Mining Sectors in MP3EI

37Source: Ministry of Energy and Mineral Resources, Republic of Indonesia

• Exploration and Exploitation• Mining Facilities• Smelter• Coal Processing Facilities (Gasification and

Upgrading, etc.)

MiningActivities

• Road• Railway• Port

Infrastructures

• Coal Based Power Plant• Mine Mouth Coal Based Power Plant• Renewable Energy Power Plant

Electricity

• Steel Industry• Cement Industry• Pulp & Paper

Other Industry

MP3EI infrastructure projects offer potential opportunities of~USD 64 billion for private sector participation

Funding Gap

599(28%)

APBN

152(7%)

PPP

400(19%)

SOE

536(25%)

41%

24%

Funding gap calculation based on:• MP3EI Database per 31 August 2012 (477 Projects)• Funding gap formula: Investment value – (allocated State Budget + SOE). Private sector funded projects are assumed 100% fully covered.• ICT sector is not included in the calculation as the projects list still under progress of validation• Energy funding gap requires further validation with PLN

MP3EI Infastructure Project Funding Sources* MP3EI Infrastructure Project Funding Gap perInfrastructure Sector

1%8%24%

27% 41%

Water(logistics),

0,2%Airport, 10,6%

Energy, 34,3%Road &Bridges, 11,0%

Railway,22,5%

Seaport,21,5%

Potential PPP opportunities are largest inthe energy, railway and seaport sector.There are also opportunities in the road,airport and water sector.

Funding Gap: ~ USD64 Billion

State-OwnedEnterpriseFunds

State Budget(APBN)

Private Funds

Mixed Funds

38

The government will lead the infrastructure development byfunding 15 projects that will ground break in 2014

The 15 infrastructure projects funded by the Government will be the kickoff for infrastructure development inIndonesia and improve Indonesia’s competitiveness through a significant reduction of logistical costs

The 15 Infrastructure projects to be funded by theGovernment have a total investment value of US$ ~ 3.72Billion

2014:

15Infrastructure

Projects(38%)

2014:

15Infrastructure

Projects(38%)

2017:

25Infrastructure

Projects(62%)

2017:

25Infrastructure

Projects(62%)

MP3EI High Priority Projects in 2014Bridge 1 ProjectWater 2 Projects

Sanitation 1 ProjectEnergy 2 Projects

ICT 1 ProjectRailway 2 ProjectsAirport 1 Project

Seaport 5 Projects

Sumatra:3 ProjectsUS$ 1.13 Billion

Kalimantan2 ProjectsUS$ 988.8 Million

Sulawesi2 ProjectsUS$ 659.2 Million

Papua-Maluku1 ProjectUS$ 164.8 Million

Bali-Nusa Tenggara2 ProjectsUS$ 144.2 Million

Java:4 ProjectsUS$ 350.2 Million

National ICT Project(Palapa Ring):US$ 288.4 Million

2014

39

25 Priority Projects that are planned for groundbreaking before2017 have large potential to be funded through PPP schemes

16 High Priority Projects with groundbreaking before 2017 will be offered to the private sector through Private-Public Partnership (PPP) schemes.

2014:

15 InfrastructureProjects(38%)

2014:

15 InfrastructureProjects(38%)

2017:

25Infrastructure

Projects(62%)

2017:

25Infrastructure

Projects(62%)

5 projects directly funded throughState Budget(20%)

3 projects indirectly funded throughState Budget (Loans)(12%)

1 project funded by State-Owned Enterprise(4%)

Those 25 projects, which will be groundbreaking before2017, have a total investment value of US$ ~32 Billion

MP3EI High Priority Projects in 2017Road 12 Projects

Water Supply 2 ProjectsRailway 3 ProjectsAirport 1 ProjectsEnergy 3 ProjectsSeaport 4 Projects

Sumatra:9 ProjectsUS$ 10.3 Billion

Kalimantan3 ProjectsUS$ 3.9 Billion

Sulawesi5 ProjectsUS$ 5.6 Billion

Papua-Maluku1 ProjectUS$ 175.1 Million

Bali-Nusa Tenggara1 ProjectUS$ 278.1 Million

Java:6 ProjectsUS$ 10.7 Billion

16 PotentialPPP Projects(20%)

16 PotentialPPP Projects(20%)

Funding sources for infrastructure projects plannedfor groundbreaking in 2017:

Funding sources for infrastructure projects plannedfor groundbreaking in 2017:

2017

40

Sumber: ISAAA 2011

3

30

60

Others

Others

Untapped

In percentage (%)Opportunity in Downstream Palm Oil Industry

The current global demand for biodiesel is92 mn tonnes, while total supply is only 33mn tonnes- untapped opportunity.

Indonesia

The current CPO national productivity inIndonesia is only 2,98 ton/ha while theproducivity potential in Indonesia is 7 ton/ha.

The existing palm oil industry isconcentrated in Sumatera, withinfollowing KPIs*

Investment in infrastructure is required tosupport the palm oil industry – investmentopportunity:

2,98

7

Current Productivity Productivity Potential

Current ProductivityProductivity Potential

Ton CPO/haOpportunity in Upstream Palm Oil Industry

GAP= 4,02 ton/ha

Source: Kementerian Pertanian RI, Pusat Data InfoSAWIT, 2010

Sei Mangkei (Medan,North Sumatera)

Dumai (Riau island)

Kampar (Riau island)

Lampung Timur

Bangka Barat(Bangka Belitung ild)

Muara Enim(South Sumatera)

Empat Lawang(South Sumatera)

Tanjung Api-Api (SouthSumatera)

Pasaman Barat(West Sumatera)

Solok Selatan(West Sumatera)

Ogan-Komeling Ilir(South Sumatera)

• Kuala Tanjung port - available forinvestment

• Dumai port expansion - govt funded• Belawan port expansion - govt fundedPort

• Pekanbaru – Kandis – Dumai toll road -available for investment

• Medan – Binjai toll road - available forinvestment

• Trans Sumatera - available forinvestment

Road

• PLTU Banjarsari 2 x 100 MW• PLTU Mulut Tambang 4x150 MW• South Sumatera 9 – Mine Mouth Coal

Fired Steam Power Plant (2 x 600MW)

• South Sumatera 10 – Mine MouthCoal Fired Steam Power Plant (1 x600 MW)

Energy**

Rokan Hulu-Hilir Siak(Riau island)

Singingi (Riau island)

Lingga (Riau island)

*Palm oil plantations are also available in Aceh,Bengkulu and Jambi provinces

**Available for investment

Indonesia offers huge investment opportunity –palm oil industry as an example (1/5)

41

Huge potential of Palm Oil Industry

4,5 4,5 4,8 5,5 5,7 5,95,2 5,4 5,6 5,8 6 6,2

2,8 3,7 4,86,1 6,4 6,6

0

20

2006 2007 2008 2009 2010E 2011E

EU25CinaIndia

In million tonPalm Oil Demand from Main Importer Countries is Continue to Rise

Sumber: Oil World, Reuters, 2010

Palm Oil Outlook Positive Worldwide:China, EU and India respectively are the

main consumers of palm oil accountable for80% of world’s demand. Rising population

and increasing income, world experiencesan increase in demand for. palm oil & its

derivats

Consumption Growth > 7% CAGR:Consumption growth of palm oil worldwide forthe last 7 years have been increased and isexpected to rise as the price of oil continues toincrease. Such growth is also on account of agrowing population as well as the rising demandfor alternative energy sources – biodiesel.

19

10 97

0

20

India Cina Indonesia Eropa

% CAGR

in %Consumption Growth of Palm Oil, 2005-2009 CAGR

Sumber: Oil World, Reuters, 2010

The demand for palm oil will likely remain strong and research and development work is being done inIndonesia.The availability of land in Indonesia, coupled with recent years of high seed sales, record energyprices, and high vegetable oil prices are factors that will result in Indonesia continuing to lead the world inpalm oil production for years to come.

42

With coal production of approximately 300million tons/ year, Indonesia has coalreserves for the long term:

The existing coal industry isconcentrated in following KPI*(select sample):

Investment in infrastructure is required to support thecoal industry – investment opportunity:

Energy

PLTU Mulut Tambang (4x150MW) (IDR7.5 trillion)

PLTU Banjarsari (2x100MW) (IDR 2.8trillion)

East Kalimantan Coal Fired Steam PowerPlant (2x100MW)

KPI Kotabaru Location: South Kalimantan

KPI Kutai Timur Location: East Kalimantan

KPI Tanah Laut Location: South Kalimantan

KPI Tanah Bumbu Location: South Kalimantan

KPI Muara Enim Location: Pendopo, South

Sumatera

KPI Tanjung Api-Api, Tanjung Carat Location: South Sumatera

KPI Palembang Location: South Sumatera

Port Maloy port, East Kalimantan (IDR 4.8

trillion) –available for investment

From 1996 to 2010, Indonesia’s coal production grew by an average of 14.8% per year with an average growth of coal exports at 15.1% peryear. The level of domestic coal consumption experienced an average growth of 13.8% per year within the period of 1996-2010.

Railway

Coal Railway South Sumatera – Lampung(IDR 802 billion) – available for investment

Coal Railway Puruk Cahu – Bangkuang,Central Kalimantan (IDR 15 trillion) –available for investment

Coal Railway Puruk Cahu – Tanjung Isuy,Central Kalimantan (IDR 20.3 trillion) –available for investment

*Source: Indonesia Coal Mining Association (2010), Directorate General Mineral (Ministry of Energy and Mineral Resources)

Export

265

Production

325

Reserves

21,000

Resources

104,800

Coal profile in Indonesia, 2010 (Mn Tons)

52.4

0.5

51.9

Others

104.8

Sumatera Kalimantan Total

Coal resources in Indonesia, 2009 (in Bn Tons)

43

Indonesia offers huge investment –opportunity coal industry as an example (2/5)

The current production capacity for bauxiteprocessing is only ~2% of total bauxitepotential in Indonesia:

The existing bauxite extraction isconcentrated in following KPI*(select sample):

Investment in infrastructure is required to supportAlluminum Smelter – investment opportunity:

Port

Teluk Melano port, West Kalimantan - govtfunded

Pontianak port improvement - govt funded New port development in Pontianak -

available for investment

Energy

PLTU Parit Baru (2x50 MW) WestKalimantan – available for investment

East Kalimantan Coal Fired Steam PowerPlant (2x100MW – available forinvestment

Other Pontianak Water Supply – govt funded

KPI Ketapang Location: West

Kalimantan

KPI Kabupaten Sanggau Location: West

Kalimantan

KPI Mempawah Location: West

Kalimantan

Private sector investment opportunities in bauxite industry are massive – for example processingbauxite into alumina and aluminum. In addition, there are also major investment opportunities forinfrastructure provision for these mines – such as private rail or private ports.

Indonesia Bauxite Profile, 2010 (tons)*

Road

New road development in KPI Ketapang -govt funded

Tayan bridge development - govt funded

*Source: Ministry of Energy and Mineral Resources

207,932

NationalBauxite

Resources,551.961.397

, 74%

NationalBauxite

Reserves,179.503.546

, 24%

NationalBauxite

Production,15.490.357 ,

2%

Indonesia offers huge investment opportunity-Aluminium Smelter as an example (3/5)

44

Indonesia offers huge investment opportunity –nickel industry as an example (4/5)The current production capacity forNickel processing is 462,000 tonsfrom 3,900,000 tons of total Nickelpotential in Indonesia

The existing Nickel industryis concentrated in followingKPI:

Investment in infrastructure is required tosupport the nickel industry – investmentopportunity:

89%

11%

National Nickel Reserves

Recent National Nickel Production Seaport

• Bitung Port Expansion(IDR 414 Billion)

• Makassar Port Expansion(IDR 2.2 Trillion)

Road

• Manado – Minut – Bitung tollroad

• Access Road to supportNickel Industry from NorthKolaka to Pomala Port IDR79.4 billion

• Access Road to supportNickel Industry from NorthKolaka to Lasususa Port

KPI Palopo Location: Luwu Timur, South Sulawesi Main Economic Activity in KPI: Nickel

mining and processing

KPI Kolaka Location: Kolaka, South East Sulawesi Main Economic Activity in KPI: Nickel

Mining

KPI Konawe Utara Location: Mandiodo, South East

Sulawesi Main Economic Activitty in KPI: Nickel

Smeltering – Pig Iron

KPI Morowali Location: Bahodopi, Central Sulawesi Main Economic Activity in KPI: Nickel

Mining, Preparation and Smeltering(Pig Iron)

Source: United States Geological Survey Energy• North Sulawesi Coal

Fired Steam Power Plant(2x55 MW) 45

Kg/c

apita

/yea

r

With the govt target to reach the steelconsumption of 100kg/capita/year by 2025, thegovt commits to boost the downstream steelindustry:

The existing steel industry isconcentrated in following KPI:

Investment in infrastructure is required to supportthe steel industry – investment opportunity:

400

85

84

0

1721

0

3229

0

10

20

30

40

50

60

70

80

90

Kalimantan Sulawesi OthersPapuaSumatera Maluku

Primary iron deposit

Laterite iron deposit

Iron deposit in Indonesia (%)

Source: Min of Industry, 2007; Indonesian Commercial Newsletter Vol 57, June 2008

Steel consumption, 2008

Port

Development of Tanah Grogotport (IDR 163 billion) – govtfunded

Expansion of Batulicin port (IDR10 trillion) – govt funded

Energy PLTA Kusan 67 MW (IDR 860

billion) – available for investment

KPI Kotabaru Location: Kotabaru, South

Kalimantan

KPI Kotawaringin Barat Location: Central

Kalimantan

KPI Tanah Laut Location: Tanah Laut,

South Kalimantan

KPI Tanah Bumbu Location: Tanah Bumbu,

South Kalimantan

KPI Cilegon Location: Banten

Road

Lingkar Selatan Cilegon road(IDR 300 billion) – govt funded

Road development in TanahBumbu area – private sectorfunded

WaterSupply

Batu Licin Water Supply (IDR200 billion) – available forinvestment

Indonesia offers huge investment opportunity –steel industry as an example (5/5)

46

4. Debottlenecking Initiatives andPriority Projects Screening

4. Debottlenecking Initiatives andPriority Projects Screening

KP3EI

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

48

“Selecting infrastructure projectswith estimated strategic

contribution for acceleration andexpansion of economic growth”

* Urgency of the project, Readiness Level, Socio-economic Effects, Environmental Effects **considering diversification of corridor and sector, synergy with principles and targets MP3EI, as well ascost-benefit analysis of project delay.

Phase 1Project Identification: Earlyidentification of projects based onseveral criteria: construction has notstarted yet, no maintenance/reparationproject or goods procurement,investment value > US$ 50 Million.

Top 200 InfraProjects

Recommendation from Line Ministries:data collection and initial discussions onprojects with KP3EI Secretariat, Bappenas,MoF, BPN and related Line Ministriesbased on the agreed criteria.*

Phase 2

78 SelectedProjects

Phase 3Technical Committee Discussion: In-depth discussion on strategic value ofselected projects using helicopter viewperspective.**56 Priority

Projects

PrioritizationCriteria

PrioritizationCriteria

ScoringSystemScoringSystem

ScoreJustificatio

n

ScoreJustificatio

n

Summary ofOutcome Priorities

Summary ofOutcome Priorities

FinalResultFinal

ResultWeighting CriteriaWeighting Criteria

The prioritization process follows a three-step methodology based oninternational best practice and involves stakeholders throughout the process

48

49

Production centers which have the potential and the high level of investment-readiness require governmentcommitment in the provision of infrastructure to reduce logistics cost and accelerate economic growth...Production centers which have the potential and the high level of investment-readiness require governmentcommitment in the provision of infrastructure to reduce logistics cost and accelerate economic growth...

1. Development ofdownstream palm oilindustry in SEZ* Sei MangkeiPT Unilever Indonesia and PTFerrostaal are investing US$1billion.

6. Karawang Industrial AreaThere are more than 7 industrial areasexporting more than 65% of Indonesia’stotal export.L’Oreal has invested USD 1 billion,automotive companies are building plantswith US$1.5 Billion investment value.

7. Tourism industry in Bali and LombokNumber of tourists who visited Lombok rose 35%per year from 2010 to 2012. Mandalika haspotential to attract US$ 300 Million investment andSenggigi is already attracting foreign hospitalitycompanies.

3. Coal Industry in Central KalimantanPotentially produce USD 4.5 billion/yearworth of coal, current production is aroundUSD 750 million

11

66

2288

7.7.

445. Coal industry in SouthSumatera39% of national coal reserves islocated in the southern part ofSumatera, with an estimatedamount of 18.13 billion tons.

Production Center

SLOC & ALKI Strategic Sea Lines

55

8. Sorong as the gateway for PapuaSorong, which is located in thenorthern part of Papua, becomes thecenter of activity and gateway ofPapua.

33

4. Bitung and Palu Investment-Focused AreasPotentially attract investment of US$ 170Million (Palu) and US$ 174 Million (Bitung) inchocolate, rattan, sea grass, coconut, fisheryand manufacturing industries.

2. Downstream palm oilindustry in East KalimantanCurrently there are 200companies and 42 oil palmplantations in East KalimantanCPO industry.

The selection of priority projects is based on the immediate needs of economicdevelopment centers and investment-readiness of downstream industries

* Special Economic Zone 49

50

The Government will fund 24 of the most urgently needed priority infrastructureprojects to ensure accelerated delivery (as early as 2014)

Kuala Tanjung Port*(US$ 600M) Palu – Parigi Rass

(US$ 100M)

Trans SumateraHigh Grade Highway(US$ 6180.1M)

Coal-Fired PowerPlant PangkalanSusu 2 x 200 MW(US$ 417.2M)

Coal-Fired PowerPlant Indramayu 2 x1000 MW(US$ 2044.5M)

Lembar BayPort (US$ 39M)

Enarotali – Tiom Road(US$ 168M)

Coal-Fired PowerPlant Asamasam 2x 100 MW (US$320M)

Coal-Fired Power PlantTakalar 2 x 100 MW(US$ 280M)

Balang IslandBridge (S157.2M)

Makassar – Pare-Pare Railway(US$ 600M)

Medan – KualanamuDouble Track Railway(US$ 78.8M)

Water SupplyJatiluhur (US$ 189M)

Sorong Port(US$ 160.9M)

Access Road toPurwakartaIndustrial Area (US$68.8M)

Dam Kolhua &Dam Raknamo(US$ 100M)

Notes: Exchange rate IDR/US$= 10.000; Palapa Ring (US$ 280M) is a priority project but not displayed (multi-corridor scale project)*) development of existing port

Following the 3 pillars of MP3EI, the entire process of selecting priority infrastructure projects is based on: Urgency of the project; ease of implementation (readiness level); social, economic, and environmental effects;• Supporting Production Centers or Investment-Focused Areas with strategic value, coupled with a high level of investment readiness, for example: Sei Mangkei,

Maloy, Bitung, Karawang. Project's contribution to strengthening National Connectivity

• Solo – Madiun (US$ 223.7 M)• Madiun Surabaya (US$415 M)

Double Track Railway

50

51

Another 32 projects (US$29 Billion in total) located in the main economic growthcenters are selected as priority projects to be offered under PPP-scheme (2017)

Following the 3 pillars of MP3EI, the entire process of selecting priority infrastructure projects is based on: Urgency of the project; ease of implementation (readiness level); social, economic, and environmental effects;• Supporting Production Centers or Investment-Focused Areas with strategic value, coupled with a high level of investment readiness, for example: Sei Mangkei,

Maloy, Bitung, Karawang. Project's contribution to strengthening National Connectivity

Note: Exchange rate IDR/US$= 10.000*) expansion of current Padang Water Supply facilities

International HubKuala Tanjung(US$ 2700M)

Maloy CPO Port(US$178M)

International HubBitung Port(US$ 3100M)

Manado – BitungTollroad(US$ 341.2M)

Cilamaya Port &Access Road(US$ 4034.5M)

Makassar NewPort (US$ 360M)

Karawang Airport(US$ 3619.9M)

Puruk CahuBangkuangRailway(US$2200M)

Balikpapan –Samarinda TollRoad(US$1217.9M)

Panimbang-Serang TollRoad (US$ 1150.7)

Water Supply SouthBali (US$ 272.7M)

• Jakarta Wastewater Disposal System(US$ 431.9M)

• Pondok Gede Water Supply (US$ 20M)• Tanjung Priok Access Road (US$

612.5)

• Umbulan Water Supply(US$ 204.2M)• Lamongan Regency

Water Supply (US$ 16.7M)

Padang Water Supply*(US$ 28M)

East Agam &Bukittinggi WaterSupply (US$ 17M)

• Batam Municipal SolidWaste Disposal (US$ 100M)

• Tanjung Sauh Port inBatam (US$ 756M, Phase I)

Coal-Fired PowerPlant Karama 4 x112.5 MW(US$ 1329M)

Consolidated UrbanDevelopment in BandaAceh (US$ 21M)

• Karya Jaya Integrated TerminalPalembang (US$ 75M)

• Monorail South Sumatera(US$ 515.5M)

Pandaan-Malang TollRoad (US$ 420M)

Solid WasteDisposal &Treatment Surakarta((US$ 30M)

• Pasir Koja-Soreang Toll Road (US$ 210M)• Cisumdawu Toll Road (US$ 1015.8M)• Integrated Railway Terminal Gedebage

(US$ 133M)• Kertajati Airport (US$ 112.5M)

Revitalization of Rail Station &Pedestrianization Malioboro(US$ 870M)

Muara Enim-Pulau BaaiRailway (US$ 3000M)

51

Project/ Investor Bottleneck issues

▪ Sei MangkeiIndustrial Estate

▪ Delay in land acquisitionprocess due to delay in theissuance of Provincial SpatialPlanning State Law (PerdaRTRWP)

▪ Infrastructure availability intime of the investment(Kuala Tanjung seaportexpansion, road, railway andKuala Namu airport)

PTPN III

Debottlenecking effort and result▪ Enhance coordination between line

ministries/agencies, other governmententities and stakeholders, whichresulted in acceleration of RTRWfinalization

▪ KP3EI ensures additional budget isprovided and allocated to supportinfrastructure projects implementationin timely manner

Samples of top down initiatives to debottleneck MP3EIEconomic Sectors Development facilitated by KP3EI (1)Samples of top down initiatives to debottleneck MP3EIEconomic Sectors Development facilitated by KP3EI (1)

▪ Bangko TengahRailway for coaltransportation

▪ Railway area overlaps withforest area

▪ Delay in issuance of IPPKH(Forest land area use permit)

▪ Coordination is conducted up toMinistrial level, resulted in clearance ofdispute settlement

▪ KP3EI facilitated the provision of ~9.881ha forest area to be used by PT BukitAsam

52

Project/ Investor Bottleneck issues

▪ ANTAMInvestment FocusedArea of North Konawe

▪ Mining Permit (Ijin UsahaPertambangan) unilaterallyrepealed by Bupati of NorthKonawe

▪ Mining Permit overlappedwith PT Duta Perkasa IntiMinerals

Debottlenecking effort and result▪ KP3EI facilitated a meeting with Bupati

of North Konawe for acceleratedmining permit issuance

▪ The result is still awaiting the re-issuance of PT Antam’s Mining Permitfrom Bupati of North Konawe

Samples of top down initiatives to debottleneck MP3EIEconomic Sectors Development facilitated by KP3EI (2)Samples of top down initiatives to debottleneck MP3EIEconomic Sectors Development facilitated by KP3EI (2)

▪ PT Vale IndonesiaInvestment Focused Areaof Morowali and Palopo

▪ Delays in the issuance ofIPPKH by the Ministry ofForestry, because therecommendation letter fromBupati of Luwu and fromGovernor of CenterSulawesi is not yet beingsent to Ministry of Forest

▪ KP3EI facilitated the meeting with PTSCM and PT Vale regarding the MiningPermit issues

▪ The resul was the publication of IPPKHfrom Ministry of Forestry to PT ValeIndonesia. Yet, on the website ofMinistry of Forestry, the IPPKH are stillon process.

53

Project/ Investor Bottleneck issues Debottlenecking effort and result

▪ Jakarta MRT ▪ Jakarta MRT project hasbeen discussed for ~20years with no significantprogress, while financialloss due to traffic hasreached IDR 12.8 T in2012

▪ GOI encouraged Local Government toproceed with the plan as per initialtimeline

▪ The recent development is that CentralGovernment accelerating their supportand plans to increase CentralGovernment funding portion from thecurrent 42% to >48% for MRT project

54

▪ Central Java IPP ▪ Location permit has notbeen issued by localgovernment due to differentinterpretations of the powerplant

▪ Requires acceleration forland acquisition andcertification

▪ The location permit that was stuck for 20months was unlocked in 3 monthsfollowing KP3EI involvement

▪ KP3EI continues support of de-bottlenecking for land acquisition processto reach financial close by Oct 2013

Samples of top down initiatives to debottleneck MP3EIEconomic Sectors Development facilitated by KP3EI (3)Samples of top down initiatives to debottleneck MP3EIEconomic Sectors Development facilitated by KP3EI (3)

Improving Investment Climate

44 regulations have been completed, 16 regulations are being revised, 28 regulations to be revised.

Revisions, corrections, and improvement made on the regulation comprise of : Law(UU); Government Regulation; Presidential Decree; Draft of Law, Draft ofGovernment Regulation; and Ministerial Decree. Some are sectors , others are cross-sectoral or regional basis.

As of April 2013

55

56

No. (Policy Substance) InstrumentA. (Fixing current balance account and maintaining exchange rate)

1 (Reducing oil and gas import – increasing biodiesel portion in diesel fuel by10% as mandatory requirement)

(Min of Energy and MineralResources Decree)

2 (Increasing export by relaxing the mineral export procedure)(Min of Energy and MineralResources DecreeCircularNotes)

3 (Tight Fiscal Policy by applying additional VAT on Luxury Goods for CBU carand branded products) (Goverment regulation)

B. (Maintain Economic Growth and Purchasing Power)1 (Guidence on the Minimum Wage Policy) (Presidential Instruction)

2 (Classification of labor intensive and medium industries) (Min of Industry Decree)

3 (Reducing the income tax rate of article 25 and postpoing the payment ofincome tax of article 29 for selected industrial tax payer) (Min of Finance Decree)

4(Relaxing regulation for Bonded Zone)a. (Up to 50% of Domestic Sales)b. (Above 50% of Domestic Sales can be provided by DG Custom on behalf of

MOF and based on the recommendation from related ministries)(Min of Finance Decree)

(Stabilization Policy and Economic Growth Package)

56

57

NO. (Policy Substance) (Instrument)B. (Maintain Economic Growth and Purchasing Power)

5 (Waiver facility on VAT for imported books) (Gov Reg and MoF Reg)

6(Fiscal Relaxation – Reducing and/or Waiver on VAT for LuxuryGoods which are no longer considered as luxuries good e.g.Electronics (Television, Refrigerator, Air Conditioner, Water Heater,Camera and Sanitary Equipment)

(Gov Reg and MoF Reg)

C. (Maintaining inflation rate)

1 Deregulate trading rules for meat and horticultural products fromusing quantity based to references price mechanism

(Min of Trade and Min of AgricultureReg)

D. (Accelerating Investment)1 Reduction of Negative Investment List – DNI (Presidential Decree)

2

(License simplification)1. (Reducing number and type of license)2. (Grouping similar license)3. (For the 1st stage, it will be applied in mainstream sector of

mineral and gas by reducing 69 license to 8 (similar group)license)

(SLA for implementation of licensesimplification)

(Stabilization Policy and Economic Growth Package)

57

58

No. (Policy Substance) (Instrument)D. (Accelerating Investment)

3 (Debottleneck obstacles in strategic investment projects)a. (Finalize renegosiation for Contract of Works - Kontrak Karya

and PKP2B)

(Revision of Gov Reg no 24/2012 onDivestation, Mainstreaming on MineralSector) and Gov Reg no 9/2012 onRoyalty

b. (Finalize financial closing of PLTU Batang 2x1000 MW) (Pres Reg)

(Stabilization Policy and Economic Growth Package)

58

REPUBLIC Of INDONESIACOORDINATING MINISTRY FOR ECONOMIC AFFAIRS

Eddy SatriyaHead of International Cooperation Division,

Secretariat of KP3EI

Deputy Assistant for ICT and Utility

Jalan Medan Merdeka Barat No. 7,Jakarta Pusat - Indonesia

Phone: +62 21 34832611; Fax: +62 21 34832609email: satriyaeddy@gmail.com @EddySatriya

Recent publications are available on:eddysatriya.wordpress.com

kolom.pacific.net.id

Eddy Satriya• 1989 :Graduated from Bandung Institute of Technology

(Telecommunication Engineering)• 1997 :Graduated from University of Connecticut (MA in Economics)• 1989-90: Program Management Consultancy (PMC-IV) for

Telecommunication Development• 1990-2005: Working in Bappenas (The National Development Planning

Agency).• 1995 : Secretary to Board of Commissioners of PT.Telkomsel• 1997- present: Visiting Lecturer in University of Indonesia, University of

Pelita Harapan, and ITB• 2002-present : Actively writes various article and column in national

papers and magazines.• 2005 (Dec)-present: Working in Coordinating Ministry for

Economics Affairs• 2011 - Present: Head of International Cooperation Division,

Secretariat of KP3EI

Contact:satriyaeddy@gmail.com

62.21.3511466 – t

62.21.3511464 – f