Document of The World Bank FOR OFFICIAL USE ONLY RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INDONESIA INFRASTRUCTURE FINANCE FACILITY PROJECT LOAN 7731-ID JUNE 24, 2009 TO THE REPUBLIC OF INDONESIA XX OCTOBER 2013 FINANCIAL AND PRIVATE SECTOR DEVELOPMENT EAST ASIA PACIFIC REGION Report No: XXX This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
ABBREVIATIONS AND ACRONYMS ADB IFC IIFF MS PDO Asian Development Bank International Finance Corporation Infrastructure Financing Facility Moderately Satisfactory Project Development Objective Regional Vice President: Country Director: Sector Manager: Task Team Leader: Axel von Trotsenburg Rodrigo A. Chaves Hormoz Aghdaey Carlos Pinerua 2
Restructuring Data Sheet Restructuring Type: Level two Last modified on date : 10/08/2013 1. Basic Information Project ID & Name P092218: ID- Indo Infrastructure Finance Facility Country Task Team Leader Carlos Pinerua Sector Manager/Director Hormoz Aghdaey Country Director Rodrigo A. Chaves Original Board Approval Date 06/24/2009 Original Closing Date: 12/31/2013 Current Closing Date 12/31/2013 Proposed Closing Date [if applicable] 11/30/2015 EA Category F-Financial Intermediary Assessment Revised EA Category F-Financial Intermediary Assessment-Financial Intermediary Assessment EA Completion Date Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 0.00 0.00 IBRD 100.00 100.00 Total 100.00 100.00 3. Borrower Organization Department Location Republic of Ministry of Finance 4. Implementing Agency Organization Department Location PT. Sarana Multi Infrastruktur (PERSERO) PT. Infrastructure Finance 3
5. Disbursement Estimates (US$m) Actual amount disbursed as of 10/08/2013 50.00 Fiscal Year Annual Cumulative 2012 0.00 50.00 Total 50.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select from the checklist below and update ISDS accordingly before submitting the package. N 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The objective of the Project is to strengthen and further develop the institutional framework of the financial sector to facilitate financing of commercially viable infrastructure projects and thereby increase provision of private infrastructure in. Key performance indicators to judge PT. IIF's success include the following outcomes: (i) increase in the number of commercially viable infrastructure projects achieving financial closure through long-term debt financing, other financial products, and advisory services from the IIFF over the life of the project; (ii) Increase in the amount of private capital (including long-term debt and equity) available for infrastructure projects over the life of the project; (iii) Increased support to government s policy making in private provision of infrastructure through advisory services from IIFF; and (iv) Increase in privately financed infrastructure in. 7b. Revised Project Development Objectives/Outcomes [if applicable] 4
INDONESIA INFRASTRUCTURE FINANCE FACILITY PROJECT P092218 LOAN 7731-ID Restructuring Paper 1. This memorandum is to request your concurrence with a Closing Date extension for the Infrastructure Financing Facility (IIF) Project (P092218) from December 31, 2013 to November 30, 2015. The extension will provide additional time to complete project activities and achieve the project s development objective (PDO). The Ministry of Finance requested this closing date extension in its letter to the World Bank dated September 27, 2013. 2. The objective of the project is to strengthen and further develop the institutional framework of the financial sector to facilitate the financing of commercially viable infrastructure projects and thereby increase provision of private infrastructure in. This US$100 million loan was approved on June 25, 2009 and became effective on April 25, 2011. The project has disbursed US$50 million to date, with US$38 million already going to sub-borrowers. 3. After a slow start, over the last year there has been significant progress in building IIF s operational capacity, including in managing safeguards requirements. To date, IIF has developed a portfolio of 10 sub-projects (valued at about Rps.2.8 trillion) in the areas of telecommunications, transport, power, and water, with 6 of those still pending approval from its Board of Commissioners. The project is currently rated Moderately Satisfactory (MS). Finally, the Borrower is in compliance with the project s audit requirement. 4. The proposed extension is necessary because, in hindsight, it may have been overly optimistic to expect IIF to become fully functional and have enough time to identify (and finance) bankable projects in just over 4 years. The extension would then allow IIF to fully disburse its project funds to sub-borrowers for existing investments and also finance additional infrastructure investments already in the pipeline. The team has reviewed IIF s action plan and is satisfied that the project would be fully implemented by the revised Closing Date. 5. The team has discussed with the Borrower a more extensive project restructuring, to include a possible restatement of the PDO, which was poorly drafted and, in its current form, difficult to align with the project s indicators. The Borrower is however more keen, at this point, on revisiting the application of the operations manual to subprojects first, which IIF feels is hampering their ability to finalize finance agreements with potential sub-borrowers on a timely basis. The related discussions with IIF and other lenders and shareholders (IFC, ADB, and KFW, in particular) are likely to be lengthy and difficult, and would then take place during the extension period. For this reason, a Closing Date extension is requested at this stage. 6. This will be the first extension of the project. 5