Exposure of Indonesia Infrastructure Project

Transcription

1 REPUBLIK INDONESIA Prof. Bambang Brodjonegoro, Ph.D. Minister of National Development Planning / Head of National Development Planning Agency Exposure of Indonesia Infrastructure Project London, 15 March 2018

2 Indonesia s Investment Climate Indonesia is a huge potential market in Asia 5 th Largest emerging market with the best middle class potential 4 th Most Populous country in the world 15 th ±5% Largest economy in the world Private consumption grows steadily Source: BPS, Team Analysis High & stable economic growth Indonesian Economic Growth (%) Source: *2018 Temporary Estimation and Bappenas Calculation 4 th Progressive infrastructure development Indonesia is projected to be the largest economy in the world by 2050 Source: World in 2050, PWC 2

3 Indonesia as a Promising Investment Destination TOP 5 EU Investment Destination Country in ASEAN 2007 Q CapEx (USD Billion) 13,259.8 Number of Projects 266 Top 3 Japanese investment destination (JBIC Ratings) 13, , Top 3 Destination for attracting investors in Asia (The Economist) 9, % of investment realization in Indonesia are FDI capital 6, Abundant natural resources Indonesia s Investment Grade from Rating Agencies: Baa3 / Positive BBB- / Positive Source: Financial Times, The Investment Coordinating Board Republic of Indonesia (BKPM) BBB- / Stable BBB- / Positive BBB- / Positive 3

4 UK Investment Realization in Indonesia # 1 # 2 # 3 # 8 (#2 in EU) Total FDI Realization in 2007 Q (USD million) TOP 3 Sectors UK s Investment Realization in Indonesia (Q3 2017) Food Processing Industry Agriculture Housing, Industrial Estate and Offices Source: The Investment Coordinating Board Republic of Indonesia (BKPM) 4

5 Strategy on Infrastructure Development Fulfillment of Basic Needs 100% drinking water access 100% sanitation access 96.6% electrification ratio Livable housing access Border & underdeveloped regions accessibility Transportation safety & security Flood Control Connectivity Maritime Highway Regional Development/ Growth Center Developed Area Intermodal Infrastructure to Support Leading Sectors + Marine Highway Port Area Intermodal Intermodal Regional Development/ Growth Center Broadband Development: Broadband Infrastructure: Palapa Ring, etc. Ecosystem: Government: e-government, e-health, e-education, e- Procurement, e-logistic Private: e-commerce. Energy Development: 35 GW Electricity consumption 1,200 kwh/capita in 2019 Reserve Margin Combined Energy Under- Developed Area Leading Sector Agriculture Manufacturing Service and Tourism Urban Development Network to support journey efficiency Development of road, mass transport system & intermodal Improve the capacity and quality of the urban road network Urban Transport Development Concept Avoid Shift Increased share of public transport Develop sustainable urban transport Energy for urban facilities Improve Increased utilization technology Urban infrastructure development by ICT utilization toward smart cities Transportation Institutional integration 5

6 Financing Infrastructure Development Increasing the significant role of SOE & Private Sector through PPP and PINA Schemes Calculation based on infrastructure investment (required) to be a middle income country by Sources: BAPPENAS- JICA, 2014: Background Study for RPJMN , Analyst team of Ministry of National Development Planning (BAPPENAS) RPJMN: National Medium-Term Development Planning 6 Total value of investment required for infrastructure in USD bn Investment value sources: Government Budget: 41.3% 22.2% 36.5% Private USD bn SOEs : Participation: USD 79.8 bn USD bn

7 Indonesian Government Facilities for PPP Schemes 7 EQUITY SPONSOR FINANCIER EQUITY DEBT GOVT. FACILITIES PROJECT DEVELOPMENT FUND VIABILITY GAP FUND GOVERNMENT GUARANTEE (IIGF) INFRASTRUCTURE FINANCING FUND (PT SMI AND IIF) GCA PPP CONTRACT AVAILABILITY PAYMENT PPP Project Special Purpose Company USER FEE INFRASTRUCTURE SERVICES USER TARIFF (USER FEE) AVAILABILITY PAYMENT OTHER LEGAL FORMS COST RECOVERY SCHEME

8 19 Sectors Covered for PPP in Indonesia 8 CONNECTIVITY Road Toll Roads Toll Bridges Roads Transportation Seaports Airports Railways Road transportation Electricity Power plants Transmission Energy conservation Street lighting Oil, Gas, and Renewable energy Telecommunication & Informatics Fiber optics E-government Satellite URBAN INFRASTRUCTURE Water supply Waste management system Water resources & irrigation Localized waste water management Centralized waste water management Public housing Urban facility Traditional market SOCIAL INFRASTRUCTURE Tourism Education facilities Sports, art & culture facilities Health Zone/ Estates Penintentiary

9 Private as the project innitiator (UNSOLICITED) Government as the project innitiator (SOLICITED) PPP Project Pipeline PLANNING PREPARATION TRANSACTION Preliminary study Outline Business Case (OBC) Final Business Case (FBC) Tender Preparation PQ Request for Proposal Bid Award PPP Agreement Signing Financial Close CONSTRUCTION 11 projects 1. Yogya - Bawen Toll Road 2. Surakarta Street Lighting 3. Multifunction Satellite 4. National Integrated Welfare System 5. Indonesia National Cancer Center Dharmais Hospital 6. Nusakambangan Industrial Correctional Facility 7. Correctional Facility Relocation (Ciangir) 1. Semarang Demak Toll Road 2. Surabaya - Madura Toll Bridge 3. Medan Municipal Transport (LRT) 4. Pekanbaru Regional Water Supply 5. University of Sam Ratulangi Teaching Hospital 6. Sidoarjo General Hospital 7. Pirngadi Hospital 1. Serang -Panimbang Toll Road (Government side 33 km) 2. West Semarang Water Supply 1. Jakarta -Cikampek South Toll Road 2. Probowangi Toll Road 3. Cisumdawu Toll Road 4. Serang -Panimbang Toll Road (PPP 51 km) 5. Bandar Lampung Water Supply 6. Nambo Regional Waste Management 1. Manado - Bitung Toll Road 2. Balikpapan -Samarinda Toll Road 3. Pandaan - Malang Toll Road 4. Batang - Semarang Toll Road 5. Serpong - Balaraja Toll Road 6. Umbulan Water Supply 7. Central Java Power Plant 8. West Palapa Ring 9. Central Palapa Ring 10. East Palapa Ring TOTAL: US$ 4.1 billion TOTAL: US$ 4.2 billion TOTAL: US$ 7.8 billion Project proponent submits a proposal and pre-fs document to GCA Business Entity submits FS FS evaluation Procurement PPP Agreement Signing Financial Close. Construction 1. Karian Water Supply 2. TOD Poris Plawad Pre-FS document evaluation to get pre-fs approval; GCA gives the rights to project proponent to prepare FS Jatiluhur Water Supply (US$ 0.1 billion) Issuing approval letter: 1. Establishing the project as an Unsolicited Project; 2. Establishing the business entity as the project initiator. 1. Krian - Legundi - Bunder - Manyar Toll Road (US$ 0.9 billion) 2. Jakarta - Cikampek Elevated II Toll Road (US$ 1.3 billion) 9

10 PINA Plays a Major Role in Infrastructure Development in Indonesia 10 Facilitation Function Facilitation Function Bring projects to financial close stage. Provide suggestions on project financing structure in collaboration with PT SMI & PT IIF. Promote projects pipeline through international roadshows and one-on-one meetings. Pipelining Function Prepare list of projects that are ready to be offered to investors and list of potential investors who will invest. Provide the latest information updates of projects to investors. Ecosystem Function Create investment ecosystem which can encourage increased investment in Indonesia: Assesment of investment regulations, policy recommendation and relaxation. Accelerate implementation of creative financing instruments: Discretionary funds (RDPT Equity) Perpetuity Notes, Asset Backed Securities, Callable Preferred Stock, Securitization and LCS.

11 How PINA Facilitates Investors in Equity Financing Enhancing the Equity Participation by Deepening Capital Markets 11 Direct Equity Financing Direct equity participation in an infrastructure company (investment platform) Equity investment Investor purchases equity instruments issued by infrastructure company (investment platform) such as discretionary funds, perpetuity notes, and callable preferred stocks or other near-equity related instruments deepening capital markets

12 PINA Projects Pipeline Waskita Toll Road Trans Java and Non-Trans Java Toll Road (18 Projects) (IDR trillion/ USD 10,000 million) 4 BIJB (Development Stage 2 and Aerocity 2 Projects) (IDR 30.0 trillion / USD 2,237 million) 2 PT PJB Power Plants (2 Projects) (IDR 14.5 trillion / USD 1,071 million) 5 PT RAI R-80 Airplane (IDR 21.6 trillion / USD 1,600 million) 3 PT PLN Power Transmission (IDR 27.5 trillion / USD 2,040 million) 6 Flores Prosperindo, Ltd. Area Development Flores Island (IDR 13.5 trillion /USD 1,000 million)

13 PINA Project Pipeline: 10 New Balis Lake Toba Area : 1175 Ha Investment : USD 1,6Billion Tanjung Kelayang Area : 324 Ha Investment : USD 1.4Billion Borobudur Area : 309,5 Ha Investment : USD 1.5Billion Wakatobi Area : 532 Ha Investment : USD 1,5Billion Morotai Area : 300 Ha Investment : USD 2,9Billion Tanjung Lesung Area : 1500 Ha Investment : USD 4Billion Kep. Seribu & Kota Tua Area : 1009 Ha Investment : USD 1,5Billion Bromo Tengger Semeru Area : 325 Ha Investment : USD 1,4Billion Mandalika Area : 1175 Ha Investment : USD 3Billion Labuan Bajo Area : 400 Ha Investment : USD 1,2Billion Tourism Authority Tourism Special Economic Zone National Strategic Tourism Zone Source : Ministry of Tourism, Republic of Indonesia,

14 Private as the project innitiator (UNSOLICITED) Government as the project innitiator (SOLICITED) Potential Financing Scheme for 10 New Balis PLANNING PREPARATION TRANSACTION Preliminary study Outline Business Case (OBC) Final Business Case (FBC) Tender Preparation PQ Request for Proposal Bid Award Agreement Signing Financial Close CONSTRUCTION PPP Scheme for Infrastructure Development PINA Scheme for Equity Financing Project proponent submits a proposal and pre-fs document to GCA Business Entity submits FS FS evaluation Procurement Agreement Signing Financial Close. Construction Pre-FS document evaluation to get pre-fs approval; GCA gives the rights to project proponent to prepare FS Issuing approval letter: 1. Establishing the project as an Unsolicited Project; 2. Establishing the business entity as the project initiator. 14

15 PINA encourages a better investment climate in Indonesia PINA pushes several new rules and regulations that improves investment appetite 15 Regulation Advocacy Coordinate with OJK, Indonesian Financial Services Authority, to relax the regulations & issue the new investment instrument(s); Coordinate with IAI, Indonesian Accounting Association for aligning of financial recording rules. Improvement of Governance & Regulation Develop strategic plan and good governance guidelines of PINA; Conducting related research and studies to strengthen the functions and roles of PINA in investment funding schemes. Socialization & Coordination Continues to hold PINA socialization forum with various stakeholders (PINA Day); Coordinate with various related associations that have potential of becoming investees or investors.

16 Coordination Facilitation Capacity Building Accelerating PPP Implementation in Indonesia PPP Joint Office Republic of Indonesia PT Penjaminan Infrastruktur Indonesia (Persero) Capital Place, 7th & 8th Floor Jl. Jenderal Gatot Subroto Kav. 18, Jakarta Indonesia Tel: PINA Center for Private Investment Ministry of National Development Planning / BAPPENAS Jalan Taman Suropati 2, Menteng Jakarta Pusat, Indonesia Tel: info@pina.bappenas.go.id