For any enquiries to :

Transcription

1 Thursday & Friday, 5-6 March Andaz Liverpool Street Hotel, 40 Liverpool St, London EC2M 7QN For any enquiries to : iipc.london@investinindonesia.uk

2 A. BACKGROUND A.. Infrastructure Development as the current Government s Priority Aiming to establish welfare for its people, Government of the Republic of Indonesia undertakes various efforts to create equitable distribution of wealth and to improve people s quality of life as a part of Government s nine development agenda, known as Nawacita Program. To achieve the agenda, there are various factors that must be well taken care of by the Government, one of which is creating good connectivity accross the country. Sufficient infrastructure can ensure the effective functioning of the economy to be well distributed and it is one of the utmost important keys to improve country s global competitiveness. Infrastructure is the 2nd pillar of the Global Competitiveness Index (GCI) assesment, and Indonesia s GCI is still on rank 36th out of 37 countries improved five position from last year, but still below its ASEAN neighbors, such as Singapore (3rd), Malaysia (23rd), and Thailand (32nd). While specifically on infrastructure, Indonesia seats on rank 52nd from 37 countries. Moreover, the Government has appointed Committee for Acceleration of Priority Infrastructure Delivery (Komite Percepatan Penyediaan Infrastruktur Priotitas/KPPIP) to support and to supervise the delivery of 37 priority projects which are considered to have high economic impacts. Aside from designing plans for infrastructure projects, the Government also has established various scheme to develop infrastructure, which are Public Private Partnership (PPP) and non-state Budget Infrastructure Financing (Pembiayaan Infrastruktur Non-APBN/PINA). The difference between these two is in the support given by the government. PPP Projects can obtain Viability Gap Funding (VGF) from Ministry of Finance to make the projects more viable and guarantee from IIGF/PT PII, while it is not the case for PINA Project. However, PINA Project can obtain equity financing from PT. Sarana Multi Infrastruktur (PT SMI), an Indonesian State Owned Enterprise established by Ministry of Finance, or from other institutions. The Government fully awares that providing sufficient infrastructure is of an essential task, and hence has designed the development of infrastructure projects on its National Medium Term Plan (Rencana Pembangunan Jangka Menengah Nasional/RPJMN) In the state budget year of 208, the central government has allocated IDR 40.4 trillion (USD 30.3 billion) to develop infrastructure, such as new roads, toll roads, bridges, railways, and new airports. The number is an increase of 5.2% from the previous year budget allocation for infrastructure. Moreover, with regard to the projects offered, KPPIP s data shown that there are 56 projects under PPP scheme with the current following status: Project Identification 9 Projects consist of Toll Roads, International Airport, Railway, Sewage System, Waste Treatment, E-goverment, and Hospital Further, the Government has chosen 245 National Strategic Projects (Proyek Strategis Nasional/PSN) and 2 Programs having strategic criteria across the nation with the total cost of about IDR 4,97 trillion or USD 309 billion. From that amount, National Development Planning Agency (Bappenas) estimated that the government s budget can only contribute to 3% of the portion, while SOEs about 30%, and private sector is expected to fill the remaining 57% - hence there are a huge opportunities for investors to take part in Indonesia s infrastructure development. (please see below diagram) Outline Business Case Final Business Case Ready For Transaction 5 Projects consist of Toll Roads, Port, Street Lightning, Satelite, Hospital, Welfare System, Education Facility Development, Sports Arena 4 Projects consist of Toll Bridge, Port, Apirport, Municipal Transport, LRT, Water Supply, Waste Treatments, Street Lighting, Hospital Project consists of Toll Road PSN Investment Value Already Tendered Available For Financing 6 projects consist of Toll Roads, Water Supply, Waste Management System, and Toll Road Total Investment Value IDR 4,97 Trillion or USD 309 Billion State Budget USD 38.6 B S/RSOEs 30% S/RSOEs USD 92.6 B Private USD B State Budget 3% Already Tendered Under Construction projects consist of Toll Roads, Water Supply, Power Plant, Satelite PSN requires funding from various sources, including state budget, SOEs/R-SOEs, and private Estimated required funding for PSN of 245 Projects + 2 Programs2: Private 57%. Exclude 6 projects which investment value is still unknown 2. 2 Programs consist of 35 GW Electricity Program and Aircraft Development Source: KPPIP, September INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 208 TERM OF REFERENCE 3

3 While, for PINA Projects are as below: A.2. Related Stakeholders in Indonesia s Infrastructure Development To carry out all the above projects, the Government has appointed some ministries and related institutions to play SECTOR* PINA PROJECT NAME & STATUS NUMBERS OF PROJECTS PROJECT COST (IDR) PROJECT COST (US$) ADDITIONAL INFORMATION their roles, as below: 0 National Strategic Projects (PSN) - under Coordinating Ministry of Economic Affairs, while the project owners are related Ministers, Regional Government, and State/Regional Owned Enterprises. Toll-Road Waskita - Toll Road South Sumatra, North Sumatera & Greater Jakarta. 3 26,4 trillion 2,000.0 million Total 760 km Status: Under Preparation Non-State Budget Infrastructure Projects (PINA) - under National Development Planning Agency (Bappenas), while the project owners are related Ministers and State/Regional Owned Enterprises. Hutama Marga Waskita - Toll Road - North Sumatera. 3,4 trillion,00.0 million Total 98 km Status: Under Preparation 03 Public Private Partnership (PPP) Projects - under PPP Office which comprises of Ministry of Finance, Bappenas, Coordinating Minister of Economic Affairs, Indonesia Investment Coordinating Board (BKPM), Government Procurement Agency (LKPP), and Indonesia Infrastructure Guarantee Fund (PT Penjaminan Infrastruktur Airport West Java International - Airport (Phase ) Kertajati, West Java 2, trillion 70.0 million International Airport Status: Ready to offer Indonesia/PT PII). The project owners of PPP Projects are related Ministers, Regional Government, and State/ Regional Owned Enterprises. PP Energi - Power Plant, Meulaboh, Aceh 7,5 trillion million Total Capacity 40 MW Status: Under Preparation 04 Infrastructure Priority Projects - under Committee for Acceleration of Priority Infrastructure Delivery (KPPIP), while the project owners, among others are related Ministers and State/Regional Owned Enterprises Apart from the above ministers/agents, Indonesian Central Bank (Bank Indonesia/BI) also provides advisory service for Power Plant (IPP) PP Energi - Power Plant, Meulaboh, Aceh 2,0 trillion 52,6.0 million Total Capacity 200 MW Status: COD on 205 some infrastructure projects in regional level. A.3. UK s Outward FDI Trends to the World Gas-Fired Diesel Power Plant, Pesanggaran, Bali 0 8, trillion 8,950.0 million Total Capacity 6,50 MW Based on Indonesia Investment Coordinating Board (BKPM) s data, total of UK s investment realisation in Indonesia in 200-Q3 207 is about USD 5.68 billion, making UK as the 2nd largest European investors in Indonesia after the Netherlands. While in global rank, UK still seats on number th. It is recorded that the UK s top sectors in Indonesia, among others are: Manufacturing (Chemical, Food, and Rubber); Food Crops and Plantation; Transportation, Warehouse Aerospace R80 Turboprop Airplane 26,4 trillion 2,000.0 million The development of the R90 turboprop regional airplane that carries passanger and Telecommunication; Mining; Hotel and Restaurant; Housing, Industrial Estates and Offices; and Electricity, Gas, and Water. Integrated Tourism Resort Tananaga - Land of Dragon - Labuan Bajo, Flores 3,2 trillion,000.0 million An integrated Eco-Tourism destination supported with Smart City Concept However from the FDI Markets data, UK s outward investment to the world, based on CAPEX, in the same period is dominated by five (5) sectors, such as: Metals; Coal, Oil and Natural Gas; Alternative/Renewable Energy; Communications; and Real Estate. While, if according to the number of projects, are: Business Services; Software and IT Services; Financial Services; Telecommunication; Industrial Machinery; and Transportation. TOTAL 9 209, trillion 5,9.6 million Therefore, from the above trends, we can see that the major interest of UK on doing outward FDI in infrastructure are on: Transportation, Telecommunication, and Renewable Energy. Source: Bappenas, INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 208 TERM OF REFERENCE 5

4 A.4. Infrastructure Funding in the UK According to World Bank, UK is the 5th biggest economies in the world with the total GDP of USD 2.6 trillion by the end of 206. Further, in the last 0 years, UK is the 8th most active country doing outward investment globally with the total investment realisation of USD 738 billion. During , UK was recorded investing the biggest in Energy, Real Estate, and Telecommunication. The high number of outward investment from UK is also supported by the condition that London is the world s most powerful financial centre having a lot of sources to fund infrastructure projects both globally and in the UK. According to Global Financial Centres Index (GFCI) 207 published by Z/Yen, London is still considered ahead of New York and other top financial cities because it is still leading in five main elements, which are business environment, financial sector development, infrastructure, human capital, and reputational and general factors. In addition, Eurostat mentioned that financial sector in UK has big role in supporting domestic economy that it contributed to 7,2% of nominal GDP in 206. A.5. Infrastructure Business Forum in London London as the World s Top Financial Centre, is the home to world class investors having capacity as both equity and debt investors. It is very relevant and important to conduct a business forum on infrastructure investment opportunities in London. Therefore, in order to support government s program to accelerate infrastructure development in Indonesia, Indonesia Investment Promotion Centre (IIPC) London in cooperation with Indonesian Embassy in London will organize a business forum called: Indonesia Infrastucture Investment Forum on 5th - 6th March 208 in London at Andaz Hotel, Liverpool Street, London. The event will expose and summarize the infrastructure investment opportunities in Indonesia and facilitate meeting between infrastructure project owners in Indonesia/potential local partners, UK potential investors and financial institutions. UK s private sector, including from financial sector, is involved in doing infrastructure funding both globally and in the UK. According to below data, private sector is financing up to 60% of the total infrastructure needs in the UK in Energy, Communications, and Utilities are the top sectors which got funding from private sectors, while Transportation and Flood Management were mostly funded by the UK s Government. Choice of Finance in the National Infrastructure and Construction Pipeline from 206/7 Total 438bn Communications 5bn Energy 207bn Flood 4bn Transport 38bn Utilities 75bn 0% 20% 40% 60% 80% 00% Public Public/Private Private Source: Institute for Government analysis of IPA, National Infrastructure Delivery Plan, Funding and Finance Supplement, 206 Further, according to thecityuk s publication in January 206, UK-based financial and related professional services firms have provided private investment in UK public infrastructure through Public Private Partnerships (PPPs). Through PPPs, more than 700 projects with capital value of more than 50 billion have been funded. The UK Government aims to invest over 483 billion up to 2 and beyond in its National Infrastructure Plan. Half of this will need to come from a diverse range of private investment sources. 6 INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 208 TERM OF REFERENCE 7

5 B. EVENT & FORMAT C. OBJECTIVES The Forum will focus on two main things: 0 Exposure of Infrastructure Projects, 5th March 208, and Funding of Infrastructure Projects, 6th March 208 The Event is targeted to have 200 participants / day and has three main agendas: 0 03 Seminar One-One-One Meeting (O3M) with representative of the Government and project owners Project exhibition by SOE and Regional Government To introduce Indonesia s infrastructure projects to UK business community as well as bridging the interest of the real sector and financial sector to UK investors in the real sector and financial sector. To help the government to overcome limited sources of financing/ investment in infrastructure sector. To facilitate O3M between owners of infrastructure projects / local partners with potential investors, both from the real sector and finance. To learn about UK s financial sector contribution to the success of infrastructure development in UK. To share about legal framework of infrastructure development in Indonesia. 8 INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 208 TERM OF REFERENCE 9

6 D. DRAFT AGENDA DAY : Indonesia Infrastructure Investment Forum (IIIF) Exposure Of Infrastructure Projects VENUE : Great Eastern, Andaz Hotel, Liverpool Street Exhibition / booth will be held in parallel with the seminar and next to the main meeting room. 7 booths will be offered to project owners, and other related partners. Thursday, 5 March (30 ) (0 ) (0 ) (0 ) REGISTRATION OPENING REMARKS: Indonesian Ambassador to the UK and Rep. of Ireland, H.E. RIZAL SUKMA KEYNOTE SPEECH: Indonesia Minister of National Development Planning/ Head of National Development Planning Agency (Bappenas), H.E. BAMBANG BRODJONEGORO KEYNOTE SPEECH: Chairman of Indonesia Investment Coordinating Board (BKPM) H. E. THOMAS LEMBONG (60 ) (60 ) (50 ) (50 ) PANEL 3 Minister Counselor of the Indonesian Embassy, Vitto Tahar PANELISTS:. Provincial Government of West Java Infrastructure projects in West Java 2. Indonesia Tourism Development Corporation (ITDC) Infrastructure projects in SEZ Mandalika IN PARALLEL WITH ONE ON ONE MEETING (O3M):. Government: BKPM, KPPIP, PUPR, and MSOEs, etc. 2. Project Owners: PT PJB, Hutama Karya, Jasa Marga, etc. 3. Pinsent Masons LLP. LUNCH 0 INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 208 TERM OF REFERENCE PANEL 2 The City UK (name tba.). PT Pembangkitan Jawa Bali (PJB): Energy Projects 2. PT Hutama Karya: Toll Road and Other Infrastructure Project 3. PT Jasa Marga: Toll Road Projects 4. Pinsent Masons LLP: Legal Framework of Infrastructure in Indonesia PANEL Director IIPC London, NURUL ICHWAN. KPPIP: Indonesia National Priority Infrastructure Projects 2. Indonesia Ministry of Public Works and Housing (PUPR): PUPR s Infrastructure Projects 3. Indonesia Ministry of State Owned Enterprises (SOE): SOE s Infrastructure Projects 4. Infrastructure Projects Authority (IPA), Cabinet Office Dr. David Hancock, Construction Director

7 D. DRAFT AGENDA DAY 2 : IIIF - Infrastructure Project Financing VENUE : Great Eastern, Andaz Hotel, Liverpool Street Exhibition / booth will be held in parallel with the seminar and next to the main meeting room. 7 booths will be offered to project owners, and other related partners. Friday, 6 March (30 ) (0 ) (45 ) (45 ) REGISTRATION KEYNOTE SPEECH: Deputy Governor of Indonesian Central Bank (Bank Indonesia) - Economic Macro and Financial Policy on Infrastructure (tbc.) PANEL KPMG (name tba.). PT PII: Infrastructure Guarantee Fund and Scheme 2. PT SMI: Infrastructure s Project Preparation and Funding 3. The City UK: The role of UK s financial sector in UK infrastructure development PANEL 2 Head of Indonesian Central Bank (Bank Indonesia) London Office, DONNY HUTABARAT. Bank Mandiri: Role of Bank Mandiri in infrastructure funding in Indonesia 2. BNI: Role of BNI in infrastructure funding in Indonesia 3. KPMG (60 ) (75 ) (5 ) O3M:. Government: BKPM, KPPIP, PUPR, and MSOEs, etc. 2. Project Owners: PJB, Hutama Karya, Jasa Marga, etc. 3. Pinsent Masons LLP. LUNCH Short Advertisement - Video of Garuda Indonesia 2 INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 208 TERM OF REFERENCE 3