National PPP landscape

  • Overview

    National PPP, Indonesia

    Number of PPPs and Investment in PPPs

    • PPP Investment
      $ 20,286 M
    • Number of PPPs Reaching FC
    • Value of PPPs Reaching FC
      $ 63,464 M

    Revenue Model and Government Support to PPPs

    • Number of PPPs with Govt. Support
    • Number of User Charge PPPs
    • Number of Govt. Pay PPPs

    PPPs under Preparation and Procurement

    • Number of PPPs under Preparation
    • Number of PPPs under Procurement

    FC = financial closure, Govt. = government, M = million.

    Sources: Government of Indonesia, Ministry of National Development Planning (BAPPENAS). 2019. Public–Private Partnership: Infrastructure Projects Plan in Indonesia 2019. Jakarta.; World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots: Indonesia.

    Considering the pivotal role of private participation in infrastructure development, the government has instituted a public–private partnership (PPP) scheme for developing infrastructure projects. It has also enacted a regulation dedicated to PPP implementation in Indonesia: Presidential Regulation No. 38 of 2015 on Cooperation between Government and Business Entity in Infrastructure Provision. This regulation complies with the Minister of National Development Planning/Head of National Development Planning Agency Regulation No. 4 of 2015, which is implemented by the Ministry of National Development Planning (BAPPENAS). The government has over the years been supporting the acceleration and improvement of the PPP processes.

    • National Framework for Enabling PPPs

      Types of PPPs


      Service Contracts

      Management Contracts

      Affermage or Lease Contracts

      Design-Bid-Build (DBB)

      Design-Build (DB)

      Build-Operate-Transfer (BOT)

      Design-Build-Finance-Operate-Transfer (DBFOT)

      Build-Own-Operate (BOO)


      Joint Venture

      Hybrid Contracts


      1.Build-Own-Operate-Transfer (BOOT)

    • National Framework for Enabling PPPs

      Eligible Sectors for PPPs


      Transportation Infrastructure

      Road Infrastructure

      Main roads, Collector roads and local roads, Toll roads, Toll bridges

      Rail and Mass Transit Infrastructure

      Railway facilities, urban mass transportation

      Waterways Infrastructure

      Infrastructure for crossing at sea river or lake

      Seaport Infrastructure

      Port facilities and passengers and cargo terminal

      Airport Infrastructure

      Airports facilities

      Logistics Infrastructure


      Water, Wastewater, and Solid Waste Management Infrastructure

      Water Resources and Irrigation Infrastructure

      Bulk water carrier pipelines, irrigation networks and water storage infrastructure including its supporting structures, among others reservoir, dam, and weir

      Water Supply Infrastructure

      Raw water unit, Production unit, Distribution unit

      Wastewater Infrastructure

      Centralized wastewater management systems including service unit, collection unit, processing unit, final disposal unit, water discharge pipeline, and sanitation Local water waste management system including local processing unit, transport unit, sludge treatment unit, final disposal unit, water discharge pipeline, and sanitation

      Solid Waste Management Infrastructure

      Transportation, Processing, Waste final processing


      ICT Infrastructure

      Telecommunication Infrastructure

      Telecommunication network, passive infrastructure such as transmission media cable ducts

      IT and Informatics Infrastructure

      E-government infrastructure


      Energy and Electricity Infrastructure

      Power Generation

      Power generation facilities

      Power Transmission and Sub-Transmission

      Power transmission, and main sub-station facilities

      Power Distribution

      Power distribution facilities

      Energy Conservation Infrastructure

      Main road lighting, energy efficiency


      Other Infrastructure

      Zone Infrastructure

      Science development region, technology innovation including science, Techno park development, Industrial zone

      Oil and gas infrastructure, including bio-energy

      Processing, storage, transportation, distribution

      Tourism Infrastructure

      ICT = information communication technology.

    • National Framework for Enabling PPPs

      PPP Institutional Framework


      Does the country have a national PPP unit?
      What are the functions of the national PPP unit?
      • Supporting the design and operationalization of the national PPP-enabling framework?

      • Helping develop a national PPP pipeline?

      • Supporting the arrangement of funding for project preparation (budgetary allocations, technical assistance funding from multilateral development agencies, operating a dedicated project preparation/project development fund)?

      • Guidance for project preparation to and coordination with the government agencies responsible for sponsoring the projects?

      • Making recommendations to the PPP Committee and/or other approving authorities to provide approvals associated with various stages of PPP process?

      • Yes

      Sources: Government of Indonesia, Committee for Acceleration of Priority Infrastructure Delivery (KPPIP); Government of Indonesia, Ministry of National Development Planning (BAPPENAS). 2019. Public–Private Partnership: Infrastructure Projects Plan in Indonesia 2019. Jakarta, Indonesia.; World Bank Group. Procuring Infrastructure Public–Private Partnerships 2018 in Indonesia.

    • National Framework for Enabling PPPs

      The PPP Process


      Does the PPP legal and regulatory framework provide for a PPP implementation process covering the entire PPP life cycle? (except for the post-award contract management)
      Does the Feasibility Assessment Stage cover
      • Technical feasibility?

      • Socioeconomic feasibility?

      • Environmental sustainability?

      • Financial feasibility?

      • Fiscal affordability assessment?

      • Legal assessment?

      • Risk assessment and PPP project structuring?

      • Value for Money assessment?

      • Market sounding with stakeholders?

      Is the PPP procurement plan required?
      Is there a need to set up a separate PPP procurement committee?
      Is competitive bidding the only method for selection of PPP private developer?
      Is the prequalification stage necessary? Or does the PPP legal and regulatory framework allow flexibility to skip the prequalification stage? Prequalification not obligatory
      Does the PPP legal and regulatory process provide the option to the preferred bidder for contract negotiations? (in case of Direct Appointment)
      Does the PPP legal and regulatory framework allow unsuccessful bidders to challenge the award/submit complaints? a
      What is the maximum time allowed for submitting a complaint/challenging the award by unsuccessful bidders from the announcement of the preferred bidder? 5 days
      Does the PPP legal and regulatory framework provide for transparency?
      Which of the following are required to be published?
      • Findings from the feasibility assessment?

      • Procurement notice?

      • Outcome of stakeholder consultations from market sounding?

      • Clarifications to prequalification queries?

      • Prequalification results?

      • Clarifications to pre-bid queries?

      • Results for the bid stage and selection of preferred bidder?

      • Final concession agreement to be entered between the government agency and the preferred bidder? And other PPP project agreements executed between government agency and preferred bidder?

      • Confidentiality

      • aAsian Development Bank (ADB). 2019. Public-Private Partnership Monitor(second edition). Manila.
      • bTypically, the Ministry of National Development Planning (BAPPENAS) includes the basic pre-feasibility outcomes in Public-Private Partnership: Infrastructure Projects Plan in Indonesia, an annual publication that includes the project descriptions, specifications, findings of environmental impact assessments, land issues, project structure briefs, and indicative internal rates of return for the projects.
      • Yes
      • No
    • National Framework for Enabling PPPs

      Standard Operating Procedures, Tool Kits, Templates, and Model Bid Documents for PPPs


      Does the country have PPP Guidelines/PPP Guidance Manual?
      Does the PPP Guidelines/PPP Guidance Manual adequately cover the process, entities involved, roles and responsibilities of various entities, approvals required at various stages, and the timelines for the various stages of the PPP project life cycle?
      What are the templates and checklists available in the PPP Guidelines/PPP Guidance Manual?
      • Project Needs Assessment and Options Analysis checklist?

      • Project Due Diligence checklist?

      • Technical Assessment checklist?

      • Environmental Assessment checklist?

      • PPP Procurement Plan template?

      Does the country have standardizedmodel bidding documents for PPPs?
      • Model Request for Qualification (RFQ) document?

      • Model Request for Proposal (RFP) document?

      • Model PPP/Concession Agreement?

      • State Support Agreement?

      • VGF Agreement?

      • Guarantee Agreement?

      • Power Purchase Agreement?

      • Capacity Take-or-Pay Contract?

      • Fuel Supply Agreement?

      • Transmission and Use of System Agreement?

      • Performance-Based Operations and Maintenance Contract?

      • Engineering, Procurement and Construction Contract?

      (except for PPAs, which are available in subsectors for non-WTE projects)
      Does the country have standardized PPP agreement terms?
      Does the country have standardized/ model tool kits to facilitate identification, preparation, procurement, and management of PPP projects?
      • PPP Family Indicator?

      • PPP Mode Validity Indicator?

      • PPP Suitability Filter?

      • PPP Screening Tool?

      • Financial Viability Indicator Model?

      • Economic Viability Indicator Model?

      • VFM Indicator Tool?

      • Readiness Filter?

      Is there a framework for monitoring fiscal risks from PPPs including the following?
      • Process for assessing fiscal commitments?

      • Process for approving fiscal commitments?

      • Process for monitoring fiscal commitments?

      • Process for reporting fiscal commitments?

      • Process for budgeting fiscal commitments?

      Are there fiscal prudence norms/thresholds to limit fiscal exposure to PPPs?
      Is there a process for assessing and budgeting contingent liabilities from PPPs?
      • aThere are reference documents. For example, the Office of Public-Private Partnership (OPPP), at the Asian Development Bank (ADB), has delivered screening tools for teaching hospitals and higher-education facilities that the Ministry of Health, the Ministry of Higher Education, and the Ministry of National Development Planning (BAPPENAS) can utilize for such subsector projects.
      • Yes
      • No
      • Unavailable

      PPA = power purchase agreement, VFM = value for money, VGF = viability gap fund, WTE = waste-to-energy.

      Key Clauses Related to PPP Agreements


      Does the law specifically enable lenders the following rights:
      • Security over the project assets?

      • Security over the land on which they are built (land use right)?

      • Security over the shares of a PPP project company?

      • Can there be a direct agreement between the government and lenders?

      • Do lenders get priority in the case of insolvency?

      • Can lenders be given step-in rights?

      Does the law specifically enable compensation payment to the private partner in case of early termination due to:
      • Public sector default or termination for reasons of public interest?

      • Private sector default?

      • Force majeure?

      Does the law enable the concept of economic/financial equilibrium?
      Does the law enable compensation payment to the private partner due to:
      • Material adverse government action?

      • Force majeure?

      • Change in law?

      • Yes
      • No

      Source: Asian Development Bank (ADB). 2019. Public–Private Partnership Monitor (second edition). Manila.

    • National Framework for Enabling PPPs

      Unsolicited PPP Proposals


      Does the PPP legal and regulatory framework allow submission and acceptance of unsolicited proposals?
      What are the advantages provided to the project proponent for an unsolicited bid?
      • Competitive advantage at bid evaluation?

      (an additional 10% for its bidding evaluation score)
      • Swiss Challenge?

      • Compensation of the project development costs?

      • Government support for land acquisition and resettlement cost?

      • Government support in the form of viabiity gap funding and guarantees?

      • Yes
    • National Framework for Enabling PPPs

      Foreign Investor Participation Restrictions


      Is there any restriction for foreign investors on:
      • Land use/ownership rights as opposed to similar rights of local investors?

      • Currency conversion?

      PPP projects with foreign sponsor participation (number) 72
      • Yes
    • National Framework for Enabling PPPs

      Dispute Resolution


      Does the country have a Dispute Resolution Tribunal? a
      Does the country have an Institutional Arbitration Mechanism? b
      Can a foreign law be chosen to govern PPP contracts?
      What dispute resolution mechanisms are available for PPP agreements?
      • Court litigation

      • Local arbitration

      • International arbitration

      Has the country signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards?
      • Yes
      • No
    • National Framework for Enabling PPPs

      Environmental and Social Issues


      Is there a local regulation establishing a process for environmental impact assessment?
      Is there a legal mechanism for the private partner to limit environmental liability for what is outside of its control or caused by third parties?
      Is there a local regulation establishing a process for social impact assessment?
      Is there involuntary land clearance for PPP projects?
      • Yes
    • National Framework for Enabling PPPs

      Land Rights


      Which of the following is permitted to the private partner:
      • Transfer land lease/use/ownership rights to third party

      • Use leased/owned land as collateral

      • Mortgage leased/owned land

      Is there a legal mechanism for granting wayleave rights, for example, laying water pipes or fiber cables over land occupied by persons other than the government or the private partner?
      Is there a land registry/cadastre with public information on land plots?
      Which of the following information on land plots is available to the private partner?
      • Appraisal of land value

      • Landowners

      • Land boundaries

      • Utility connections

      • Immovable property on land

      • Plots classification

      • Yes

      Source: ADB. 2019. Public–Private Partnership Monitor (second edition). Manila. publication/509426/ppp-monitor-second-edition.pdf.

  • Government Support for PPP Projects

    Project Funding Support


    Project Funding Support
    Is there a dedicated government financial support mechanism for PPP projects?
    What are the instruments of government financial support available under this government financial support mechanism?
    • Capital grant

    • Operations grant

    • Annuity/availability payments

    • Guarantees to cover

    • Currency inconvertibility and transfer risk

    • Foreign exchange risk

    • War and civil disturbance risk

    • Breach of contract risk

    • Regulatory risk

    • Expropriation risk

    • Government payment obligation risk

    • Credit risk

    • Minimum demand/revenue risk

    • Risk of making annuity/availability payments in a timely manner

    What are the caps/ceilings for the government financial support under each of the abovementioned government financial support instruments?
    (i) VGF - maximum of 49% of Project Cost
    (ii) Maximum Guarantee limited to 6% of GDP during 2018-2021
    Is there a minimum PPP project size (investment) for a PPP project to be eligible for receiving government financial support? For the VGF, total investment at least Rp100 billion
    Are there minimum financial commitment requirements for the private developer equity before the government support could be drawn? At least 20% of the equity
    Is the government financial support required, usually the bid parameter for PPP projects?
    Are unsolicited PPP proposals eligible to receive government financial support?
    Are there standard operating procedures for providing government financial support to PPP projects?
    • Appraisal and approval process

    • Budgeting process

    • Disbursement process

    • Monitoring process

    • Accounting, auditing, and reporting process

    (not clear if auditing processes are available)
    Who are the signatories to the government financial support agreement?
    GCA, IIGF, and SPC (for guarantees)
    GCA, MOF, and SPC ( for VGF)b
    Who is responsible for monitoring the performance of PPP projects availing government financial support?
    • Independent engineer?

    (independent consultants)
    • Government agency?

    • Ministry of Finance?

    (MOF Feasibility Support Committee)
    What are the other forms of government support available for PPP projects?
    • Land acquisition funding support?

    • Funding support for resettlement and rehabilitation of affected parties?

    • Tax holidays/exemptions?

    • Real estate development rights?

    • Advertising and marketing rights?

    • Interest rate/cost of debt subventions?

    • Other subsidies and subventions?

    Can the other forms of government support be availed over and above the government financial support through various instruments listed above? (schemes offered by PT SMI and PT IIF)
    • Yes
    • No
    • Unavailable

    GCA= government contracting agency, GDP = gross domestic product, IIGF = Indonesia Infrastructure Guarantee Fund, MOF = Ministry of Finance, PJPK = government institution responsible for a PPP project, PT IIF = Indonesia Infrastructure Finance, PT SMI = PT Sarana Multi Infrastruktur (an Indonesian state-owned infrastructure financing company), SPC = special purpose company, VGF = viability gap fund.

    Project Development Funding


    Project Development Funding
    What are the various sources of funds for PPP project preparation?
    • Budgetary allocations

    • Dedicated project preparation/project development fund

    • Technical assistance from multilateral/bilateral/and donor agencies

    • Recovery of project preparation funding from the preferred bidder

    At what stage of the PPP project, can the project preparation/development funding be availed by the government agency?
    • Pre-feasibility stage

    • Detailed feasibility stage

    • Transaction stage

    Is there a list of project preparation/project development activities towards which the project development funding can be utilized?
    Can the project development funding be utilized to appoint transaction advisors for PPP projects?
    Is there a specific process to be followed by government agencies to appoint transaction advisors?
    What are the payment mechanisms for making payments to transaction advisors?
    • Timesheet-based

    • Milestone-based

    Are there standard agreements and documents to avail project development funding?
    Who are the signatories to the project development funding agreements? GCA and PT SMI or IIGF
    • Yes

    GCA = government contracting agency, IIGF = Indonesia Infrastructure Guarantee Fund, PT SMI = PT Sarana Multi Infrastruktur (an Indonesian state-owned infrastructure financing company).

  • Maturity of the PPP Market


    PPP Project Statistics
    • Is there a national PPP database for the country?

    Is the distribution of PPP projects across infrastructure sectors available?
    Is the distribution of PPP projects across various stages of the PPP life cycle available? a and b
    • aThere is no single consolidated database that serves as the PPP database for the country. The Asian Development Bank (ADB) is working to create a national project database. There are multiple lists maintained by different entities such as the Ministry of Finance and the Ministry of National Development Planning (BAPPENAS).
    • bGovernment of Indonesia, BAPPENAS. 2019. Public-Private Partnership: Infrastructure Projects Plan in Indonesia 2019. Jakarta.
    • Yes
    • No

    Sources: Government of Indonesia, BAPPENAS. 2019. Public–Private Partnership: Infrastructure Projects Plan in Indonesia 2019. Jakarta.

    PPP Project Pipeline


    Does the country publish a national PPP project pipeline?
    At what frequency is the national PPP project pipeline published? Annually
    Is the national PPP project pipeline based on the national infrastructure plan for the country?
    • Yes

    PPP Book


    Sources of PPP Financing
    Who are the typical entities financing PPP projects in the country?
    • Private developers

    • Construction contractors

    • Institutional/financial/private equity investors

    • Pension funds

    (indirectly by purchase of bonds)
    • Insurance companies

    • Banks

    • Nonbanking financial corporations/Financial institutions

    • Donor agencies

    • Government agencies and state-owned enterprises

    What is the distribution of financing among these entities financing PPP projects?
    Does the country have the history/track record of issuing bonds by infrastructure projects?
    How many infrastructure projects private developers for infrastructure projects have raised funding through bond issuances?
    What is the value of funding raised through capital markets by PPPs?
    Does the country have a matured derivatives market to hedge certain risks associated with PPPs?
    Does the country have a national development bank?
    Does the country have credit rating agencies to rate infrastructure projects?
    Typically, what are the credit ratings achieved/received by infrastructure projects?
    Is there a threshold credit rating for infrastructure PPPs below which institutional investors, pension funds, and insurance companies would not invest in infrastructure PPPs?
    What is the typical funding model for infrastructure PPPs -- corporate finance or project finance?
    Are there regulatory limits/restrictions for the maximum exposure that can be taken by banks to infrastructure projects?
    • Yes
    • No
    • Unavailable