Risk Allocation and

Mitigation Measures for

PPP Infrastructure Projects
in Southeast Asia
Chinese Taipei Seminar on
Financing and Risk Mitigation Measures for
Promotion of Private Participation in Infrastructure Projects
July 31, 2018

Muhammad Ridho Dr. Eng.

Senior Vice President
Project Monitoring & Claim Management Division
©
©2018
2018| |PTwww.iigf.co.id
Penjaminan Infrastruktur Indonesia (Persero)
 PROFILE OF PRESENTER

Muhammad Ridho Dr. Eng.

Position:
Senior Vice President of Project Monitoring and Claim Management of
Indonesia Infrastructre Guarantee Fund (IIGF / PT PII)

Academic Background:
• Doctor of Engineering, Urban & Environmental Engineering, Kyushu
University, Japan
• Master’s Degree, Urban & Environmental Engineering, Kyushu University,
Japan
• Bachelor’s Degree, Urban Planning, Diponegoro University, Indonesia

Experiences:
• Various feasibility study, design dan transation advisory of infrastructure projects in Japan,
Indonesia, Malaysia, Vietnam and Uzbekistan
• Project preparation and transaction advisory of PPP Projects
• Project appraisal of PPP projects in various sectors (water supply, toll road and
telecommunication)
• Project monitoring of various PPP projects guaranteed by IIGF
© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)
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 OUTLINE

1 Risk Allocation in Infrastructure Project

2 Risk Mitigation in Infrastructure Project

3 Experience Dealing with Risk Allocation

IIGF Role in Risk Allocation & Mitgation and

4 Infrastructure Development in Indonesia

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 RISK ALLOCATION
IN INFRASTRUCTURE PROJECTS

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero) 4

 RISK DEFINITION IN INFRASTRUCTURE PROJECT
MANAGEMENT RISK DEFINITION
RISK DEFINITION
Risk management is an aproach to risk by
Risk is a variation in things that may occur naturally or the understanding, identifying, and evaluating the
possibility of occurance of an event that are expected to be project’s risk. Risk on a construction project is
a threat to property and financial benefits due to the however unable to eliminate but may be reduced
danger will occur. or transfered from one stakeholder to another

CATEGORIES OF RISKS RISK ALLOCATION PRINCIPLES

Any risk shall be allocated to the Stakeholder who:

Risk Alocation Interface Risk
• Have better ability to control the possibility of risk occurance;
Risk Income Political Risk
• Have better ability to manage the impact of the possibility risk
Sponsor Risk Force Majeur Risk occurance;
Financial Risk Assets • Have better the ability to take the risk with the lower risk costs.
Ownership Risk
Operational Risk
Network
Design, Construction Connection
& Operational

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 RISK EVALUATION INFRASTRUCTURE PROJECT

Risk Allocation
Principles  Reach
Value for Money
Risk towards to public sectors  Capacity Risk transfered to public sector 
for risk mitigation  not necessarily give increasing risk premium  higher
Value for Money project costs.

Guarantee The Risk is Manageble  Bankability (for debt financing)

• What is the main risk event of the project? How risk allocation and risk management strategy/risk mitigation?
• In general, risk on design, Construction and Operational Private sectors
• Risk event on land acquisition,permits, regulations/policy Public sectors / Governments

(As much as possible, all project risk are indentified, quantifed, and mitigated (prevented or impaired)

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 TYPICAL RISK ALLOCATION COVERAGE
Design,
Site Network
Political Risk Construction & Sponsor Risk Operating Risk Revenue
Acquisition connectivity
Commisioning

• Currency • Land • N/A • VGF • N/A • Failure in • Road &

inconvertability acquisition disbursement AP transportation
• Expropriation delay • Refund of land payment connectivity
Public risk • Complex acquisition fund • Delay in • Smoothness of
• Change in law resettlement transportation
Allocation • Fail in
(DTT) periodical
system
tariff
obtaining • Competing
adjustment
permits facilities

• N/A • Contaminati • Default of project • Failure project • Failure in initial • N/A

• Design faults
on/pollution company, sponsor, management tarif
• Failure to
to the site or lender • O&M cost determination
maintain security
• Disruption • Increase in operation • Misscalculatio
Private & safety
of the construction cost n of tariff
• Default of sub- increase
Allocation community contractors • Fail to achieve • Incompetent of
estimates
convenienc • Increase in financial close technology &
e around construction cost • Forex, inflation information
the project
system

*) For complete set, IIGF published Risk Allocation Guidelines Book

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 PROJECT STAGES ON RISK
THAT MAY BE CAUSED BY GOVERNMENT

Pre Construction Construction Operational

Risk Payment Service

Tariff Adjusment Approval

Discrimintory legal changing/ specific projects

Significant Failure/delay of the important apporval

Early termination due to government inaction

Delay in the provision of

access on land acquisition

Budget Approval for Project

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 RISK ALLOCATION PRINCIPLES

Conceptually, the appliation of the principles in PPP project as follow :

• Risks are difficult to control to the government to meet the principle of cost evectiveness (construction, operational), should be transfered to private sector;
• Risk beyond control of both stakeholder, or equally influenced by both stakeholder should be shared by both stakeholder (force majeur/natural disaster);
• Risk that can be managed by Government as they are better positioned or easier to obtain information than private/project company (regulation or legislation risk)
should be taken by government;
• Risk even though has been transfered, still give the exposure to Government/Government Contracting Agent (inhibits the availability of essential service to the
community), where if Project Company fails to fulfil its obligation, the government could take over the project
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 HOW TO GUARANTEE THE RISK?

On coverage infrasturcture guarantee by

IIGF, Regulation of infrastructure guarantee
defines that the financial obligation of
Government in the PPP’s contract are
arising from risk caused by triggering event
as follows:

a) Government action/inaction or other

than Government Contrating Agent
(GCA) in matter which according to the
laws or regulations of the Government
have the authority to perform such
action;

b) Policy of Government or other than

GCA;

c) Unilateral decision by Government or

other than GCA;

d) Inablity of the Government in

performing an obligation determined to
it by the Enterprises under a
cooperation agreement (breach of
contract).

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 INFRASTRUCTURE RISK WHICH GUARANTEED BY IIGF

Occurance by Government inaction or other than Government Contracting Agent

(GCA)

Caused by Government’s regulation or other than GCA

Caused by unilateral desicion from Government or other than GCA

Caused by breach of contract by GCA

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 COMMITMENT OF PROJECT OWNER (CA) AND
PROJECT SUPERVISION COMMITTEE

Implementation of Risk Mitigation Project Supervision Committee

CA is commited to do their best effort for: Government and IIGF will appoint each
• Handling; representative in forming a committee which
aims to oversee the implementation of the
• Managing;
Project in accordance with the guarantee
• Preventing; dan agreement and to supervise the aspects of
• Reducing Risk Mitigation
Impact of the occurance of the infrstructure
risk under its responsibility based on the risk
already allocated in the cooperation
agreement and the project guarantee
agreement

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 RISK MITIGATION
IN INFRASTRUCTURE PROJECTS

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 RISK MITIGATION (1/4)

Risk Category Allocation Risk Mitigation

Land acquisition and Public • The Government clears project landsite before PC procurement
resettlement process;
• Government needs to set the project location and ensure the
availability of all the necessary documents;
• Government needs to ensure the availability of land acquisition
funds;
• Government needs to ensure the availability of team that
conduct the land acquisition process;
• Government needs to ensure that the land acquisition process
could be run in accordance to the regulation.
• Fair compensation and good communication with those
impacted
• Coordination with the related parties in determining
compensation executor or provider including the compensation
scheme and form.

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 RISK MITIGATION (2/4)

Risk Category Allocation Risk Mitigation

Design, Construction Private • Clarification during the tender process;

and Commissioning • Capacity of good design
Risks • The tender documents should be presented clearly and easily to
understand to improve the competition and lower the cost of the
project.

Sponsor Risks Private • SPV is supported by credible and solid sponsors

• Selecting credible sponsors during PQ and Tender Process

Financial Risks Private • Tariff indexation factor

• Interest rate hedging
• Purchase price index, considering currency fluctuation

Financial Risks (VGF Public • Ensure timely budgeting process

Disbursement) • VGF disbursement requirement and period

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 RISK MITIGATION (3/4)

Risk Category Allocation Risk Mitigation

Operating Risks: Private • Competent contractors
Poor performances • Clear output specification
Decrease of quality • Good human resources and industrial relation policies
and quantity of output • Penalty mechanism
• Good standard of work and maintenance
Operating Risks: Public • Sound regulation and good coordination of the agencies
Decrease or
uncertainty of quality
and quantity of input
Revenue Risks Public • Good marketing program
(water sector) • Good operational performance
• Adjustment of tariff
Netwrok Connectivity Public • Good contract understanding by public sector
Risks • Coordination and integration of project implementation schedule
Interface Risks Publci and • Applied the same standard in advance
Private • Communication and coordination system is designed, agreed and
socialized properly in advance

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 RISK MITIGATION (4/4)

Risk Category Allocation Risk Mitigation

Political Risks Private • Clear contract provisions including compensations
• Political risk insurance
• Mediation and negotiation
• Government guarantee
Force majeure Riks Shared • Insurance
• Either party should be able to terminate the contract and trigger an
early termination

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 RISK ALLOCATION IN POWERPLANT PROJECT
(BOT Full consession Scheme) PPP Structure

Contracting Agency PT PLN (Persero)

Project Company PT Bhimasena Power Indonesia
Location Batang, Jawa Tengah
Concession period 25 year since COD
Guaranteed Guarantee
Risk Exposure Guarantee period 21 year since COD
Contract date 6 Oktober 2011
Tariff adjustment 30 Million
Financial close 3 Juni 2016
Political risk 30 Million
COD date Unit 1: 31 May 2020
Default by Govt 30 Million Unit 2: 30 Nov 2020
Area 225 Ha
Capacity 2 x (1000 MW)
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 RISK ALLOCATION IN POWERPLANT PROJECT
(BOT Full consession Scheme)

Pra-Construction Stage Construction Stage Operation Stage

Design Mis-estimation of Mis-estimation
construction cost lifecycle cost
Mis-budgeting
Change of law (generic &
Change of design by Govt
specific)
Change of
Design Site clearance Change of variable cost
Fail to achieve Scheduling Operation risk
Financial Close
Ground/Site Conditions Demand Risk
Termination risk Construction Mis-match between
revenue and financial
Fluctuation of interest rate model
Private
Fire, explosion etc. Default by Private
Government
Postpone by Govt Default by Govt
Guaranteed by IIGF Project commissioning Natural Force Majeure

Political Force Majeure Political Force Majeure

Termination risk Termination risk

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 RISK ALLOCATION FOR PPP PROJECT
Toll Road Project (BOT Full consession scheme)
PPP Structure

Ministry Of Finance

BATANG Government Ministry of Public Works

Guaranteed Guarantee Contracting Agent and Housing
SEMARANG
Risk Exposure Project Company PT Jasamarga Semarang
Delay of Land Batang
USD 13.8 M
Acquisition Location Middle Java
Investment Rp 11,05 T
Repayment of
Bailout for Land USD 143 M Length 77,6 Km
acquisition Traffic Estimation 16.241 – 21.592 cars / day

Consession 45 years
Tariff Adjusment USD 15.3 M Period
Tariff Rp 1.100 / km at 2019
Political Risk USD 188 M
FIRR 16,3 %
Guarantee Period 15 since COD
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 RISK ALLOCATION FOR PPP PROJECT
Toll Road Project (BOT Full consession scheme)
TYPE OF RISK ALLOCATION STAGE
Land acquistion
Change in law (specific) Construction, Operation
Demand risk Operation
Tariff adjustment Operation
Termination due to natural force majeure Operation
Political risk (including termination) Construction, Operation
Addition of land acquisition Pre-construction
Design risk Pre-construction
Permit risk Pre-construction
Sponsor risk (failed to achieve FC) Pre-construction
Construction risk Construction
Fluctuation risk of rate interest Construction
Limitation risk of construction space Construction
Cost overrun risk of construction Construction
Delay of construction Construction Private
Change in law (general) Operation Government
Operation and maintenance risk Operation
Guaranteed by IIGF
Inflation risk Operation
Handover risk from Private to Government Operation

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 RISK ALLOCATION FOR PPP PROJECT
Fiber-optic Telecommunication Backbone (Availability Payment Scheme)
PPP Structure

Bank (Debt) 80% Equity (20%)

Ministry of PPP Contract

Project Company
Communication Availability Payment

Access Charge
Recourse Agreement Guarantee Agreement

Network User
Network Provider

Government Contracting Ministry of

Agent Communication
Guaranteed Guarantee Project Company PT Palapa Ring Barat
Risik Exposure Location 5 regency
Consession Period 15 years
Termination
USD 98 B Construction Period 18 months
Risks
Cabel Length (FO) 1.980 km
Availability Microwace -
USD 23.8 M SLA 95% (Availability)
Payment
5% (Reliability)
Tariff USD 3,600/Mbps/tahun
Speed 10 Mbps in Rural Area
20 Mbps in Urban Area
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 RISK ALLOCATION FOR PPP PROJECT
Fiber-optic Telecommunication Backbone (Availability Payment Scheme)

TYPE OF RISK ALLOCATION STAGE

Land acquisition
Change in law (specific) Construction, Operation
Demand risk (Availability Payment) Operation
Termination due to natural force majeure Operation
Political risk (including termination) Construction, Operation
Addition of land acquisition Pre-construction
Design risk Pre-construction
Permit risk Pre-construction
Sponsor risk (failed to achieve FC) Pre-construction
Construction risk Construction
Fluctuation risk of rate interest Construction
Limitation risk of construction space Construction
Cost overrun risk of construction Construction
Delay of construction Construction
Change in law (general) Operation
Operation and maintenance risk Operation Private
Inflation risk Operation Government
Handover risk from Private to Government Operation
Guaranteed by IIGF

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 RISK ALLOCATION FOR PPP PROJECT
Water Supply Project (BOT Scheme)
PPP Structure

Ministry of Ministry of
Public Works Finance
Bank (Debt) 70% Equity (30%)
Construction
support VGF Support
KOTA GRESIK PPP Contract Project Company

Government of Recourse
Agreement Water supply
East Java
KOTA SURABAYA Agreement
DAWUAN Guarantee
Agreement
PDAM PDAB
Water supply agreement
KOTA SIDOARJO

Contracting Governor of
Guaranteed Guarantee Agency East Jawa Province
KOTA PASURUAN Risk Exposure
Project Company PT Meta Adhya Tirta Umbulan
Termination
KAB PASURUAN USD 78 B Location East Java
Risks
SPRING WATER Investment USD 158 B
Breach of Transmision pipe 92,3 km
monthly USD 13.8 M
payment Service Target 1,3 – 1,8 M persons
Capacity 4000 l/second
Conssesion Period 25 years
FIRR 15,02 %
Guarantee Period 15 years since COD
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 RISK ALLOCATION FOR PPP PROJECT
Water Supply Project (BOT Scheme)
TYPE OF RISK ALLOCATION STAGE
Land acquistion
Change in law (specific) Construction, Operation
Demand risk Operation
Quality of raw water Operation
Quantity of raw water Operation
Political risk (including termination) Construction, Operation
Addition of land acquisition Pre-construction
Design risk Pre-construction
Permit risk Pre-construction
Sponsor risk (failed to achieve FC) Pre-construction
Construction risk Construction
Fluctuation risk of rate interest Construction
Limitation risk of construction space Construction
Cost overrun risk of construction Construction
Delay of construction Construction
Private
Change in law (general) Operation
Government
Operation and maintenance risk Operation
Inflation risk Operation Guaranteed by IIGF
Handover risk from Private to Government Operation
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 RISK SHARING POLICIES/PRACTICES
In Southeast Asia Countries
Phillipines Thailand Vietnam
The Government may provide any form of The risk will be allocated between public and 1. The risk should be allocated to the agent
support or contribution to solicited projects, private sectors, who is best to handle each who is best able to bear them or handle
such as, but not limited, to the following: risk of the project. The project agency has to them and which, therefore will reduce
1. Cost Sharing determine such risk sharing when conduct a their costs.
2. Credit Enhancements feasibility study. 2. Regarding risk allocation, there will be
3. Direct Government Subsidy spesifications in different levels.
4. Direct Government Equity a) In new PPP Decree (drafting), there
5. Performance Undertaking are some principles for risk
6. Legal Assistance allocation. Moreover, provision of
7. Security Assistance feasibility study also require
analysis for risk allocation
b) In circulars (following the New
Decree), specific key risks will be
identified

Phillipines use preferred risk allocation Thailand don’t use preferred risk Vietnam don’t use preferred risk allocation
matrix as reference since 2014. The allocation matrix as reference. Risk matrix as reference. Risk allocation has to be
Generic Preferred Matrix was adopted allocation has to be analysed during analysed during project preparation and in
by the ICC – Cabinet Committee on 7 project preparation and in the feasibility the feasibility study report. However, the risk
December 2010, published and updated study report. However, the risk allocation allocation has to be negotiated and
by the PPP Center. It is intended to be has to be negotiated and concluded on a concluded on a case-by-case basis in the
recommendatory and envisioned to case-by-case basis in the project contract. project contract.
serve as reference of the ICC and the
proponent agencies in the ICC review of
PPP projects.
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 RISK MONITORING/MITIGATION
In Southeast Asia Countries

Phillipines Thailand
The PPP Center shall be responsible for the Once the investment contracts has been signed, the
coordination and monitoring of projects responsible Ministry of the project shall appoint the
implemented of projects implemented under Supervisory Committee, together with its duties which
Contractual Agreements or schemes authorized are:
under the Revised IRR of the Amended BOT 1. To monitor and supervise the project to ensure the
Law. Concerned Agencies shall periodically operations are conducted in accordance with the
submit to the PPP Center: investment contract
1. Information on the status of projects 2. To consider proposing approaches to resolving
implemented problems arising from project implementation to the
2. A copy of all unsolicited proposals & other project agency
related documents 3. To require that project agency/private contractual
The PPP Center is also mandated to guide the party to give an explanation or submit relevant
agency in the preparation & development of the documents
project and shall report to the Government, 4. To report operational results, problems and
President & the congress. approaches to resolving problems to responsible
Minister for acknowledgement
5. To consider amendments to the investment
contract.

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 PRINCIPLES IN DEALING WITH RISKS IN PPP

 Project preparation is very important phase in PPP Project;

 Market sounding/consultation and one-on-one meeting with bidders &
lenders are necessary to understand their appetite and interest;
 Risks that has principle of cost evectiveness (construction,
operational), should be transfered to private sector;
 Risk that can be managed by government because they has better
position than private (regulation or legislation risk) should be taken by
government;
 Government should take over some risks and provide incentives
(VGF, support, etc.) to make feasible and bankable project.

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 EXPERIENCES IN DEALING WITH
RISKS ALLOCATION
STUDY CASE: UMBULAN WATER SUPPLY

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero) 29

 PROJECT NEEDS AND PURPOSES

PROJECT PURPOSES

Government has obligation to  To utilize Umbulan water spring (4.000 l/s)

provide water supply to their for drinking water to the community
citizen
 To develop production system, transmission
Water supply for 5 regencies and pipeline and offtake for 5 regencies & cities
cities in West Jawa is still
necessary using PPP scheme
 To supply clean water for 5 regencies and
Limited raw water supply cities
 To supply clean water (drinking water
quality) for 1.3 to 1.8 million persons (260
Umbulan spring water has debit
5000 l/s with drinking water quality
thousand) connections in 2021.
 To accelerate target of national government
long term in providing water supply to
community

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 PROJECT PROFILE
Government Contracting Government of East Jawa Province
16
Agency (GCA)
BOOSTER PUMP
Role of MOF • Provide Project Development Fund (via SMI)
15 • Provide VGF
• Provide Government Guarantee (via IIGF)
Role of MOPW • Construct offtake facilities
• Construct WTP Rejoso river
14 • Reduce tariff for ROW rental of toll road
13 Role of 5 regencies/cities Offtaker
12 Role of Private Design, construct, operate & maintenance production
unit and transmission pipeline to 16 offtake points
11
Role PDAB • Receive and purchase water from private
10
• Operate & maintain pipe from offtake to PDAM
9
7 reservoir
8 Role of PDAMs Distribute water to end-users and collecting payments
6
5 Raw water a) Umbulan spring water: 4000 lps
b) Rejoso river 300 lps (back up)
4
2 3 Capacity 4.000 lps
Length of Transmission + 92.3 km
1 Pipe
CAPEX estimation + USD 158 Million
WATER SPRING Service target 1.3 – 1.8 million persons
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 PROJECT PREPARATION AND TRANSACTION

Contracting Agency – Bidding Process

Announcement of
PQ Result
Issuance of Bidding
document
Addendum of Issuance of final Bid
Bid document Document
Announcement Sigining of PPP
Bid Submission of winner Contract
5 years
10 Aug 2011 24 Feb 2012 28 Aug 2015 30 Sep 2015 25 Nov 2015 4 Feb 2016 21 Jul 2016 process

26 Aug 2011 4 Oct 2011 25 Feb 2013 7 Oct 2013 14 Aug 2015 29 Sep 2015 21 Jul 2016
Screening Issuance Submission of Issuance of Project update Issuance of Sigining of Guarantee
form from CA CTP guarantee LOI IPA Agreement and
application Recourse Agreement

IIGF – Guarantee Process

Activities during Project Preparation

 Finalization of PPP Scheme  Public consultation
 Finalization of Design  Stakeholder Management
 Application and approval of VGF through MOF  Adjustment to regulation
 Application and approval of Const Support through  Land acquisition
MOPW
 Agreement between CA to each city/regency

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 PROJECT STRUCTURE

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 OUTLINE OF AGREEMENTS

A. Outline of PPP Agreement

• Regulating rights and obligation of GCA and
PPP Co, but excluded water supply and
purchase agreement
B. Outline of water supply and
• GCA delegate PDAB to conduct water purchase agreement
supply and purchase agreement with PPP
Co. • Regulating right and obligation of
PDAB and PPP Co in water supply
• Guarantee from GCA to provide capital and purchase
investment to PDAB and breach of payment
of PDAB. • Regulating tariff during concession
period

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 SCHEMATIC DESIGN
WTP in Rejoso River
(previously excluded)

Raw water at Intake:

• Headpond 3,000 lps
• Tapak 700 – 1,000 lps
• Rejoso river 300 lps (Back-up)

• Total length of transmission pipe

92,3 km
• 76,2 km via toll road
• Including 3 booster pump

Previously allocated
to Private
• 16 tapping points – Water meter
by Private
• Water meter to Reservoir -
Construct by MOPW and
operate by PDAB
• Reservoir – Distribution network
by PDAM

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 SCOPES OF EACH STAKEHOLDERS

Phase of the Project

No. Project Component
Construction Operation
1. Intake PRIVATE PRIVATE

2. Water Treatment Plant PRIVATE PRIVATE

3. Pump and Main Transmission Pipe PRIVATE PRIVATE

4. Transmission Pipe from Tapping to PDAM Reservoir MOPW PDAB

4. PDAM Reservoir MOPW PDAM

5. Primary and Secondary Pipe Distribution PDAM PDAM

6. Tertiary Pipe Distribution PDAM PDAM

7. Billing and Collection PDAM

8. Contract Management and Aggregator PDAB

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 STRUCTURE OF WATER TARIFF

Capitalization
PPP
Contract
Water supply & Agreement
purchase
agreement
Cooperation
PDAB PPP Co. Agreement
Tariff (MOU)
Water supply & USD 0.23/m3
purchase
agreement
USD USD USD USD USD USD
0.32/m3 0.12/m3 0.25/m3 0.24/m3 0.27/m3 0.15/m3

5 Regencies
A B C D E and Cities
Financial
USD USD USD USD USD USD Support
0.64/m3 0.37/m3 0.69/m3 0.60/m3 0.64/m3 0.37/m3

Users Users Users Users Users Users

* Tariff will be adjusted every year based on inflation

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 THE ROLE OF IIGF
IN RISK ALLOCATION & MITIGATION
OF INFRASTRUCTURE DEVELOPMENT IN INDONESIA

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 CHARACTERISTICS & MAIN ROLE OF IIGF

Under direct
To support
State-owned
Enterprise
100%
Owned by
acceleration of
infrastructure
supervision of
Ministry of Finance
of Indonesia
(SOE) Government development in
of Indonesia Indonesia

MAIN ROLE:
As single window policy to evaluate, prepare and provide government guarantee for infrastructure
project under PPP scheme or other scheme based on government assignment.

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 BUSINESS MODEL OF IIGF

PJPK Cooperation Agreement

Government Contracting Investor/Sponsor
Agency

Guarantee
Application Recourse Agreement
Package Risk Mitigation Plan
Guarantee Agreement

Regulatory & Co guarantor/

Capital Injection Liquidity facility Multilateral
Ministry of
Development
Finance
Agency
Counter Guarantee

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 EXTENDING COOPERATION
WITH WORLD CLASS INSTITUTION

 Technical Assistance Purposes Loan USD 4,6 juta

World Bank  Stand-by Loan (Guarantee Capacity) USD 25 juta

Multilateral
 MOU Institutional Development
Development MIGA
Agency  Guarantee Capacity

IDB - ICIEC
Islamic Corporation
 MOU knowledge sharing initiative
for the Insurance of
Investment & Export
 Guarantee Capacity
Credit

Bilateral

Private Banks insurance

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 PROJECT PORTOFOLIO 2018 (SUMMARY)

WATER PROJECT TOLL ROADS PROJECT

TOTAL
PROJECT
INVESTATION
2 2 SPAM (Umbulan & Bandar
Lampung) 10 Toll Roads guaranteed by PT
PII (Persero)

PIPE LENGTH CAPACITY TOTAL LENGTH

USD 12.47
BILLION

114 KM 4750 LPS 667,2 KM

POWER PROJECT ICT PROJECTS

TOTAL
GUARANTEE
3 ICT Projects guaranteed
By PT PII (Persero) 76
SITES
TOTAL
MICROWAVE EXPOSURE
Located in Batang, Central Java
TOTAL LAND CABLE TOTAL SUBMARINE
CAPACITY

2 x 1000
LENGTH CABLE LENGTH
USD
2.80
MW 2047 KM
5935 KM BILLION

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 PROJECT PORTOFOLIO 2018
Assumption of Exchange Rate:
US$ 1 = IDR 13.000
JAPEK II
SERANG SELATAN
PANIMBANG TOLL ROAD JALAN TOL MANADO
PALAPA RING PALAPA RING BITUNG PALAPA RING
TOLL ROAD 62,95 KM PAKET BARAT PROBOWANGI PAKET TENGAH
83,9 KM 172,91 KM TOLL ROAD PAKET TIMUR
1980 KM 2647 KM 39 KM 6224 KM

$410 $961 $1792

MILLION
MILLION $98 MILLION
$106 $392 $392
MILLION MILLION MILLION MILLION

JAPEK II ELEV.
TOLL ROAD
36,4 KM

$1235
MILLION

CISUMDAWU
TOLL ROAD
60,27 KM BALIKPAPAN
SAMARINDA
TOLL ROAD
$646 99,3 KM
MILLION
$761
BATANG PANDAAN UMBULAN MILLION
SPAM SEMARANG CENTRAL JAVA KALENDER TOTAL
MALANG WATER INVESTMENT
BANDAR TOLL ROAD POWER PLANT TOLL ROAD SUPPLY TOLL ROAD
LAMPUNG 77,6 KM 2 x 1000 MW 38,2 KM VALUE
39,9 KM 4000 Lt/s
750 Lt/s

$853 $3215 $454 $158 $938 $12.47

$58 MILLION MILLION MILLION MILLION MILLION BILLION
MILLION

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 RISK ALLOCATION MATRIX
As a Guideline on Risk Management Inftastucture Project with PPP Scheme in Indonesia

Risk Allocation Matriks is used for:

• Early guideline for implementing PPP project (Evaluating the feasibility and forming the draft Project
Cooperation Agreement;
• Quantified the Government risk exposure and the candidate enterprises.

A regulation mandate
infrastructure guarantee
(PMK 260/2011); referal
transaction on PPP
project (infrastructure
guarantee) reviwed
regularly every 12
months for refinement
which involving related
stakeholders

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF GUARANTEED PROJECT PORTOFOLIO

1 CJPP Project 2 Umbulan Water Supply

ASIA AWARD Project
Power Plant 2x1000 MW in Batang, Bulk Water distribution channel of 4.000
Central Java 7 Maret 2017 l/second through out 5 municipal/city of East
Java
$3215 Million GA Effective Project Finance
Deal of the Year $ 158 Million GA Effective
Guarantee Period – 21 Years 2016 GLOBE ASIA
Guarantee Period– 15 Years
• Monthly Payment
• Monthly Payment
• Termination (Co-Guarantee Mei 2016
• Termination
Government)
Best Contracting Agency: East Java Provincial
Contracting Agency: PLN Environmental- Government
IJGlobal Concerned
Euromoney Project
Power Sector AWARD Water Sector
9 Maret 2017

The project delays for 43 years

IIGF had an active role as a Best Power Deal and now start the construction
in
Chairman of the Joint after being supported by the
Asia Pacific PDF & VGF from the
Monitoring Committee until
Financial Close was Government and Guarantee
facility from IIGF
achieved.

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF GUARANTEED PROJECT PORTOFOLIO

Palapa Ring Project is the first PPP project with Availability Payment scheme in Indonesia
The projects are completed in less than a year and with the role of IIGF in facilitating the
projects and strong commitment from Contracting Agency

3 West Palapa Ring Project 4 Central Palapa Ring Project 5 East Palapa Ring Project
Backbone network across 5 cities in West Backbone network across 17 cities in Backbone network across 35 cities in
region of Indonesia: 1.122 Km sea and Central region of Indonesia: 1.676 Km East region of Indonesia 5.681 Km sea
land sea and land and land

$ 98 Million GA Effective $ 106 Million GA Effective $ 392 Million GA Effective

Guarantee Period– 15 Years Guarantee Period– 15 Years Guarantee Period – 15 Years
• Availability Payment • Availability Payment • Availability Payment
• Termination • Termination • Termination
Contracting Agency: MoCI Contracting Agency: MoCI Contracting Agency: MoCI

ICT Sector

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

46
 IIGF GUARANTEED PROJECT PORTOFOLIO

6 Batang Semarang Toll Road 7 Manado-Bitung Toll Road 8 Pandaan-Malang Toll Road
75 Km Toll Road from Batang to 39 Km Toll Road from Manado to Bitung 38 Km Toll Road from Pandaan to Malang
Semarang
$ 392 Million GA Effective $ 454 Million GA Effective
$ 853 Million GA Effective
Guarantee Period– 15 Years
Guarantee Period– 15 Years
Guarantee Period – 15 Years • Land acquisition advance fee • Land acquisition advance fee
• Land acquistion advance fee • Land Acquisition • Land Acquisition
• Land Acquisition • Limited Liquidity Fund • Limited Liquidity Fund
• Limited Liquidity Fund • Toll fee adjustment • Toll fee adjustment
• Toll fee Adjustment • Termination • Termination
• Termination Contracting Agency: MoPublic
Contracting Agency: MoPublic
Contracting Agency: MoPublic Work&Housing Work&Housing
Work&Housing

Toll Roads Sector

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

47
 IIGF GUARANTEED PROJECT PORTOFOLIO

9 10 Jakarta-Cikampek (Elevated) 11
Balikpapan-Samarinda Toll Road Cisumdawu Toll Road
Toll Road
99 Km Toll Road from Balikpapan to 36 Km Toll Road from Jakarta to 60 Km Toll Road from Cileunyi to Dawuan
Samarinda Cikampek through Sumedang

$ 761 Million GA Effective $1235 Million GA Effective $ 646 Million GA Signed

Guarantee Period– 15 Years Guarantee Period– 15 Years Guarantee Period– 15 Years

• Land acquisition briding fund • Toll fee adjustment • Land acquisition briding fund
• Land acquisition • Political Risk • Land Acquisition
• Limited Liquidity Fund • Termination (Co-Guarantee • Toll fee adjustment
Government)
• Toll fee adjustment • Political Risk
Contractng Agency: MoPublic
• Termination • Termination (Co-Guarantee
Work&Housing
Contracting Agency: MoPublic Government)
Work&Housing Contracting Agency: MoPublic
Work&Housing

Toll Roads Sector

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF GUARANTEED PROJECT PORTOFOLIO

12 13 Krian Legundi Bunder Manyar 14 Jakarta Cikampek II (South) Toll

Serang Panimbang Toll Road Road
Toll Road
83,9 Km Toll Road from Serang to 38,2 Km Toll Road from Surabaya to 62,95 Km Toll Road from Jakarta to
Panimbang Mojokerto Cikampek (South Area)

$ 410 Million GA Effective $ 938 Million GA Effective $ 961 Million GA Signed

Guarantee Period– 15 Years Guarantee Period– 15 Years Guarantee Period– 15 Years

• Land acquisition briding fund • Toll fee adjustment • Land acquisition briding fund
• Land acquisition • Political Risk • Toll fee adjustment
• Limited Liquidity Fund • Termination (Co-Guarantee • Political Risk
Government)
• Toll fee adjustment • Termination (Co-Guarantee
• Termination (Co-Guarantee Contracting Agency: MoPublic Government)
Government) Work&Housing Contracting Agency: MoPublic
Contracting Agency: MoPublic Work&Housing
Work&Housing

Toll Roads Sector

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 IIGF GUARANTEED PROJECT PORTOFOLIO
15 Probolinggo Banyuwangi Toll 16 Lampung Water Supply
Road
Project
172,91 Km Toll Road from Probolinggo to
Banyuwangi Bulk Water distribution channel of
750 l/second
$1792 Million GA Signed
$ 58 Million GA Signed
Guarantee Period– 15 Years
• Land acquisition briding fund Guarantee Period– 15 Years
• Land acquisition • Monthly Payment
• Limited Liquidity Fund • Termination
• Toll fee adjustment
• Termination (Co-Guarantee Contracting Agency: MoPublic
Government) Work&Housing
Contracting Agency: MoPublic
Work&Housing

Water Sector
Toll Roads Sector

© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)

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 THANK YOU

PT Penjaminan Infrastruktur Indonesia (Persero)

Capital Place 7-8th Floor, Jl. Jenderal Gatot Subroto Kav.18
Kuningan Barat, Jakarta Selatan 12710 – Indonesia
www.iigf.co.id

© 2018
© 2018 | PT Penjaminan Infrastruktur Indonesia (Persero)