The Role of IIGF in Infrastructure

Development in Indonesia

September 2017

Armand Hermawan
Chief Financial Officer
PT Penjaminan Infrastruktur Indonesia (Persero)
Indonesia Infrastructure Guarantee Fund

PT Penjaminan Infrastruktur Indonesia (Persero)

 Emerging Opportunity - Substantial Infrastructure Need
In line with Indonesia’s Medium Term Development Plan 2015-
2019
FINANCING
Sector US$ Bio
SOURCE PLAN
Road 54.7 Realized & Allocation:
1 • 2015: $ 19.1 Bio
Railway 16.86 STATE • 2016: $ 23,7 Bio
INFRASTRUCTURE NEEDS (2015 – 2019)

Air Transport 10.75 BUDGET 41,3% • 2017: $ 28.9 Bio

Gap to 2019: $ 76 Bio
Sea Transport 44.12 $ 147.7 Bio
Water Resources 33.65
Housing 24.44 Include Equity
2 Injection to SOE
Urban Transport 6.42 SOE from Government
Land Transport (incl. Ferry) 3.5
$ 79.6 Bio 22,2% budget allocation
Power 74.6
Energy 37.8
Waste Management 30.07
3 Promoting Public
ICT 20.9 PRIVATE Private Partnership
TOTAL 358 $ 130.7 Bio 36,5% (PPP)

PT Penjaminan Infrastruktur Indonesia (Persero)

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 Emerging Opportunity - Substantial Infrastructure Need
Various fiscal policy & support to close the Gap using private sectors

US$ 131 Bn US$ 358 Bn

• 225 National
Private

Investment target
36.5% Strategic Project
Sector

2015-2019
US$ 80 Bn • 30 National Priority
US$ 148 Bn SOE 22.2% Project
• Social Infrastructure
Project
41.3% Closing the GAP • Others
APBN/
APBD
Fiscal tools for PPP Scheme

1. Project Development Fund

2. Viability Gap Funding
3. Availability Payment
4. Guarantee
5. Infrastructure Financing
6. Land Acquisition Support

PT Penjaminan Infrastruktur Indonesia (Persero)

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 Emerging Opportunity - Substantial Infrastructure Need
Potential Source of Funding in PPP

US$ 131 Bn US$ 358 Bn

Banking Industry as the biggest pool
still has its own limitation. • 225 National
Private

Investment target
36.5% Strategic Project
Sector

2015-2019
US$ 80 Bn • 30 National Priority
US$ 148 Bn SOE 22.2% Project
• Social Infrastructure
Project
41.3% • Others
APBN/
APBD In Indonesia alone there is USD $95 billion in
assets under management
Indonesia AUM 2015, USD Mn
Bank 81,919
Public pensions 9,800
Insurance 732
Private pensions 556
Investment companies 100
Foundations 19
*) Based on McKinsey Study on IIGF Long-term Strategy
Assignment
PT Penjaminan Infrastruktur Indonesia (Persero)
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 IIGF Profile
Key Financial Figures (30 June 2017)
PT PII (Persero) Established on 30 December 2009.
“IIGF” As a “Single Window” in providing Paid in Capital (CI) Retained Earning
government guarantee provision for ~US$ 149 M
~US$ 525 M
Infrastructure Projects. IIGF is also valued for
its state budget’s ring fencing function.
Projects Guaranteed 13 projects in 4 Sectors: Electricity, ICT, Opex Ratio (OER) Income Margin Revenue
Water & Toll Road 22.23% 63.11% ~US$ 29 M
~Project Value: Rp 119 Tr or ~ US$ 8.9 Billion
Guarantee amount: Rp 29 Tr ~ US$ 2.1 Billion Int’l Credit Rating
Sovereign rating

BBB-By Fitchratings
Gearing Ratio Leveraging Ratio*
Guarantee Value/ Capital Ratio Project Size/ Capital Ratio

3,1 x 13,2 x
at max exposure

*Economic Impact

PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF Guaranteed Project Portofolio
PALAPA RING JALAN TOL PALAPA RING
PALAPA RING PAKET TENGAH MA-BIT PAKET TIMUR
PAKET BARAT 2647 KM 39 KM 8454 KM
JALAN TOL 1980 KM
SER-PAN
83,9 KM Rp,
1,29
Rp,
1,38 Rp,
5,1 Rp,
5,1
TRILIUN TRILIUN TRILIUN
TRILIUN
Rp,
5,33
TRILIUN

JALAN TOL
JAK-PEK II
36,4 KM

Rp,
14,7
TRILIUN

JALAN TOL JALAN TOL

CISUMDAWU BAL-SAM
60,27 KM 99 KM

Rp,
8,21 Rp,
10
TRILIUN TRILIUN
JALAN TOL PLTU JALAN TOL SPAM JALAN TOL
BAT-SEM BATANG PAN-MAL UMBULAN KR-LG-BU-MN
77 KM 2 x 1000 MW 38 KM 4000 Lt/Detik 38,2 KM

Rp,
10 Rp,
40,5 Rp,
6 Rp,
2,1 Rp,
9,02
TRILIUN TRILIUN TRILIUN TRILIUN TRILIUN

PT Penjaminan Infrastruktur Indonesia (Persero)

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Extending Cooperation with World Class Institution

 Technical Assistance Purposes 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

Mitra Swasta insurance

PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF Value Proposition
Government Guarantee through IIGF

SAFEGUARD
Support the continuation of the project RISK
through a careful analysis of safeguard. Fair risk allocation between
government and private investor
(Mirroring World Bank Safeguard Policy) Clear risk mitigation
As written in IIGF Operation Manual

VALUE TRANSPARENCY
PROPOSITION
Increasing bidding competition
resulting the most optimal project
investment
BANKABILITY
Provide more comfort for
financier to support the project.
Reducing the cost of fund

ACCOUNTABILITY
Guarantee provision that can be verified during the bidding process

PT Penjaminan Infrastruktur Indonesia (Persero)

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 Keywords
for Projects to be eligible for IIGF (Sovereign) Guarantee

1 2 3
Viable Risks Tender
(financial and (cover government (guarantee covers
technical) triggered risks) is attached in RfP)

PT Penjaminan Infrastruktur Indonesia (Persero)

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 Typical Risk Allocation Coverage

Design, Construction Network

Political Risk Site Acquisition & Commisioning Sponsor Risk Operating Risk Revenue connectivity

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

inconvertability acquisition • Refund of land payment transportation
• Expropriation delay acquisition fund • Delay in connectivity
Public risk • Complex (DTT) periodical • Smoothness of
Allocation • Change in law resettlement tariff transportation
• Fail in adjustment system
obtaining • Competing
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 maintain
to the site or lender • O&M cost determination
security & safety
• Disruption of • Increase in operation • Misscalculation
Private • Default of sub-
the construction cost of tariff
contractors increase
Allocation community • Increase in • Fail to achieve • Incompetent of
estimates
convenience construction cost financial close technology &
around the • Forex, inflation information
project
system

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

PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF Guarantee Offering
Government Guarantee through IIGF – Typical Risks Covered

Pre-construction Construction Operation

Payment risk

Tariff adjustment risk

Discriminatory change in law (project specific)

Delays in necessary approval

(Early) termination by government

Land acquisition

Project Budget approval

PT Penjaminan Infrastruktur Indonesia (Persero)

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 Proven Business Model for PPP Guarantee

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
Agenvy
Counter Guarantee

PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF is extending its reach to support Indonesia’s infrastructure
projects

IIGF

Project Corporate
Finance Finance

Project Credit
Under
Guarantee PerPres Guarantee
PerPres Development
82/2015;
38/2015
100/2015

PPP Scheme Bank Loan Bond

19 infrastructure sectors Infrastructure company/developer

PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF Guaranteed Project Portofolio

1 2 Umbulan Water Supply

CJPP Project ASIA AWARD Project
Power Plant 2x1000 MW in Batang, Central Bulk Water distribution channel of 4.000 l/second
7 Maret 2017 through out 5 municipal/city of East Java
Java
Project Finance
Rp 40.5 Tn GA Effective Deal of the Year
Rp 1.9 Tn GA Effective
2016 GLOBE ASIA
Guarantee Period – 16/21 Years Guarantee Period– 15 Years
• Monthly Payment (Rp 300 Bn) • Monthly Payment (Rp 180 Bn)
Mei 2016
• Termination (Co-Guarantee Government) • Termination (Rp 1.1 Tn)
Best Contracting Agency: East Java Provincial Gov’t
Contracting Agency: PLN Environmental-
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
Monitoring Committee until PDF & VGF from the
Financial Close was achieved. Government and Guarantee
facility from IIGF

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 Palapa Ring Barat Project 4 Palapa Ring Tengah Project 5 Palapa Ring Timur Project
Backbone network across 5 cities in West Backbone network across 17 cities in Central Backbone network across 35 cities in East
region of Indonesia ; 1.122 Km sea and land region of Indonesia ; 1.676 Km sea and land region of Indonesia 5.681 Km sea, land and
Mv

Rp 1.3 Tn GA Effective Rp 1.4 Tn GA Effective Rp 6.09 Tn GA Effective

Guarantee Period– 15 Years Guarantee Period– 15 Years Guarantee Period – 15 Years
• Availability Payment (Rp 310 Bn) • Availability Payment (Rp 336 Bn) • Availability Payment (Rp 840 Bn)
• Termination (Rp 1 Tn) • Termination (Rp 1.1 Tn) • Termination (Rp 4.8 Tn)
Contracting Agency: MoCI Contracting Agency: MoCI Contracting Agency: MoCI

ICT Sector

PT Penjaminan Infrastruktur Indonesia (Persero)

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 IIGF Guaranteed Project Portofolio
6 7
Batang Semarang Toll Road
75 Km Toll Road from Batang to Semarang
Rp 9.8 Tn GA Effective
Guarantee Period – 15 Years
• Land acquistion advance fee (Rp 584 Bn)
• Land Acquisition (Rp 170 Bn)
• Limited Liquidity Fund (Rp 200 Bn)
• Toll fee Adjustment (Rp 200 Bn)
• Termination (Rp 2.45 Tn)
Contracting Agency: MoPublic Work&Housing
1.851 Km
Est. 470 Km
25%
Toll Road
Distance
PT Penjaminan Infrastruktur Indonesia (Persero)
Manado-Bitung Toll Road
39 Km Toll Road from Manado to Bitung
Rp 5.1 Tn GA Effective
Guarantee Period– 15 Years
• Land acquisition advance fee (Rp 816 Bn)
• Land Acquisition (Rp 80 Bn)
• Limited Liquidity Fund (Rp 375 Bn)
• Toll fee adjustment (Rp 200 Bn)
• Termination (Rp 3.2 Tn)
Contracting Agency: MoPublic Work&Housing
Toll Roads Sector
Est Length Toll road build
2015 - 2019
Part being guaranteed by
Government through IIGF
8 Pandaan-Malang Toll Road
38 Km Toll Road from Pandaan to Malang
Rp 6 Tn GA Effective
Guarantee Period– 15 Years
• Land acquisition advance fee (Rp 1.35 Tn)
• Land Acquisition (Rp 134 Bn)
• Limited Liquidity Fund (Rp 81 Bn)
• Toll fee adjustment (Rp 200 Bn)
• Termination (Rp 5.2 Tn)
Contracting Agency: MoPublic Work&Housing
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 IIGF Guaranteed Project Portofolio
9 10
Balikpapan-Samarinda Toll Road
99 Km Toll Road from Balikpapan to
Samarinda
Rp 10 T GA Effective
Guarantee Period– 15 Years
• Land acquisition briding fund (Rp 1.9 Tn)
• Land acquisition (Rp 194 Bn)
• Limited Liquidity Fund (Rp 241 Bn)
• Toll fee adjustment (Rp 200 Bn)
• Termination (Rp 6.1 T)
Contracting Agency: MoPublic Work&Housing
PT Penjaminan Infrastruktur Indonesia (Persero)
Jakarta-Cikampek (Elevated)
Toll Road
36 Km Toll Road from Jakarta to Cikampek
Rp 14.7 Tn GA Effective
Guarantee Period– 15 Years
• Toll fee adjustment (Rp 200 Bn)
• Political Risk (Rp 400 Bn)
• Termination (Rp 16.4 Tn) (Co-Guarantee
Government)
Contractng Agency: MoPublic Work&Housing
Toll Roads Sector
11
Cisumdawu Toll Road
60 Km Toll Road from Cileunyi to Dawuan
through Sumedang
Rp 8.2 Tn GA Signed
Guarantee Period– 15 Years
• Land acquisition briding fund (Rp 867 Bn)
• Land Acquisition (Rp 163 Bn)
• Toll fee adjustment (Rp 200 Bn)
• Political Risk (Rp 400 Bn)
• Termination (Rp 5,8 Tn) (Co-Guarantee
Government)
Contracting Agency: MoPublic Work&Housing
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 IIGF Guaranteed Project Portofolio

12 Krian-Legundi-Bunder-Manyar 13
Serang-Panimbang Toll Road
Toll Road
84 Km Toll Road from Serang to Panimbang
38 Km Toll Road from Krian to Manyar
through Lengudi and Bunder

Rp 9.02 Tn GA Signed Rp 5.3 Tn GA Signed

Guarantee Period– 15 Years Guarantee Period– 15 Years

• Land Acquistion (Rp 249 Bn) • Land acquisition briding fund (Rp 894 Bn)
• Toll fee adjustment (Rp 200 Bn) • Land Acquisition (Rp 149 Bn)
• Political Risk (Rp 400 Bn) • Toll fee adjustment (Rp 200 Bn)
• Termination (Rp 9 Tn ) (Co-Guarantee • Political Risk (Rp 400 Bn)
Government) • Termination (Rp 5.83 Tn) (Co-Guarantee
Government)
Contracting Agency: MoPublic Work&Housing
Contracting Agency: MoPublic Work&Housing

Toll Roads Sector

PT Penjaminan Infrastruktur Indonesia (Persero)

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 Disclaimer

All information presented were taken from multiple sources and

considered as true by the time they were written to the
knowledge of PT Penjaminan Infrastruktur Indonesia
(Persero)/Indonesia Infrastructure Guarantee Fund.

Any questions can be submitted to:

CORPORATE SECRETARY
Tel : +62 21 5795 0550
Fax : +62 21 5795 0040
Email : info@iigf.co.id

PT Penjaminan Infrastruktur Indonesia (Persero)

PT Penjaminan Infrastruktur Indonesia (Persero)