for any enquiries email to : iipc.london@investinindonesia · thursday & friday, 15 - 16 march...

Thursday & Friday, 15 - 16 March 2018

09.30 - 14.00

Andaz Liverpool Street Hotel, 40 Liverpool St, London EC2M 7QN

For any enquiries email to : [email protected]

INDONESIA INFRASTRUCTURE INVESTMENT FORUM (IIIF) 2018 TERM OF REFERENCE 32

A. BACKGROUND

A.1. Infrastructure Development as the current Government’s Priority

PSN Investment Value

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.

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

Outline Business Case

Final Business Case

Ready For Transaction

Already Tendered –

Available For Financing

Already Tendered –

Under Construction

9 Projects consist of Toll Roads, International Airport, Railway, Sewage System, Waste

Treatment, E-goverment, and Hospital

15 Projects consist of Toll Roads, Port, Street Lightning, Satelite, Hospital, Welfare

System, Education Facility Development, Sports Arena

14 Projects consist of Toll Bridge, Port, Apirport, Municipal Transport, LRT, Water Supply,

Waste Treatments, Street Lighting, Hospital

1 Project consists of Toll Road

6 projects consist of Toll Roads, Water Supply, Waste Management System,

and Toll Road

11 projects consist of Toll Roads, Water Supply, Power Plant, Satelite

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 2017-2018

is still on rank 36th out of 137 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 137 countries.

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) 2015-2019. In the state budget year of 2018, the central government has allocated IDR 410.4 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.

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 4,197 trillion or USD 309 billion.

From that amount, National Development Planning Agency (Bappenas) estimated that the government’s budget can

only contribute to 13% 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)

Total Investment Value

State Budget USD 38.6 B

S/RSOEs USD 92.6 B

Private USD 177.76 B

IDR 4,197 Trillion orUSD 309 Billion

Source: KPPIP, September 2017

PSN requires funding from various sources, including state budget, SOEs/R-SOEs, and private

Estimated required funding1 for PSN of 245 Projects + 2 Programs2:

1. Exclude 16 projects which investment value is still unknown

2. 2 Programs consist of 35 GW Electricity Program and Aircraft Development

Private57%

State Budget13%

S/RSOEs30%


To carry out all the above projects, the Government has appointed some ministries and related institutions to play their roles, as below:

Apart from the above ministers/agents, Indonesian Central Bank (Bank Indonesia/BI) also provides advisory service for some infrastructure projects in regional level.

National Strategic Projects (PSN) - under Coordinating Ministry of Economic Affairs, while the project owners are related Ministers, Regional Government, and State/Regional Owned Enterprises.

Non-State Budget Infrastructure Projects (PINA) - under National Development Planning Agency (Bappenas), while the project owners are related Ministers and State/Regional Owned Enterprises.

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 Indonesia/PT PII). The project owners of PPP Projects are related Ministers, Regional Government, and State/Regional Owned Enterprises.

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

While, for PINA Projects are as below:

1

1

1

1

10

1

1

19

13,4 trillion

2,1 trillion

7,5 trillion

2,0 trillion

118,1 trillion

26,4 trillion

13,2 trillion

209,1 trillion

3 26,4 trillion

1,010.0 million

170.0 million

570.0 million

152,6.0 million

8,950.0 million

2,000.0 million

1,000.0 million

15,902.6 million

Source: Bappenas, 2017

2,000.0 million • Total 760 km• Status: Under Preparation

Waskita - Toll Road South Sumatra, North Sumatera & Greater Jakarta.

Hutama Marga Waskita - Toll Road - North Sumatera.

West Java International - Airport (Phase 1) Kertajati, West Java

PP Energi - Power Plant, Meulaboh, Aceh

PP Energi - Power Plant, Meulaboh, Aceh

Gas-Fired Diesel Power Plant, Pesanggaran, Bali

R80 Turboprop Airplane

Tananaga - Land of Dragon - Labuan Bajo, Flores

• Total 98 km• Status: Under Preparation

• International Airport• Status: Ready to offer

• Total Capacity 410 MW• Status: Under Preparation

• Total Capacity 200 MW• Status: COD on 2015

Total Capacity 6,510 MW

The development of the R90 turboprop regional airplane that carries 80-90 passanger

An integrated Eco-Tourism destination supported with Smart City Concept

ADDITIONALINFORMATION

PROJECTCOST(US$)

PROJECTCOST(IDR)

NUMBERSOF

PROJECTSPINA PROJECT

NAME & STATUSSECTOR*

Toll-Road

Airport

PowerPlant(IPP)

Aerospace

IntegratedTourismResort

TOTAL

A.2. Related Stakeholders in Indonesia’s Infrastructure Development

A.3. UK’s Outward FDI Trends to the World

Based on Indonesia Investment Coordinating Board (BKPM)’s data, total of UK’s investment realisation in Indonesia in 2010-Q3 2017 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 11th. 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 and Telecommunication; Mining; Hotel and Restaurant; Housing, Industrial Estates and Offices; and Electricity, Gas, and Water.

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.

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.

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Further, according to theCityUK’s publication in January 2016, 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 2021 and beyond in its National Infrastructure Plan. Half of this will need to come

from a diverse range of private investment sources.

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 2016. Further, in the last 10 years, UK is the 8th most active country doing outward investment globally

with the total investment realisation of USD 738 billion. During 2007-2016, 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) 2017 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 2016.

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

2016-2017. 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 2016/17

Source: Institute for Government analysis of IPA, National Infrastructure Delivery Plan, Funding and Finance Supplement, 2016

0% 20% 40%

Public Public/Private Private

60% 80% 100%

Utilities

Transport

Flood

Energy

Communications

Total

£75bn

£138bn

£4bn

£207bn

£15bn

£438bn

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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 15th - 16th March 2018 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.


B. EVENT & FORMAT

The Forum will focus on two main things:

Exposure of Infrastructure Projects, 15th March 2018, and

Funding of Infrastructure Projects, 16th March 2018

The Event is targeted to have 200 participants / day and has three main agendas:

Seminar

One-One-One Meeting (O3M) with representative of the Government and project owners Project exhibition by SOE and Regional Government

C. OBJECTIVES

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.

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Thursday, 15 March 2018

DAY 1: Indonesia Infrastructure Investment Forum (IIIF) – “Exposure Of Infrastructure Projects”

D. DRAFT AGENDA

10 11

REGISTRATION OPENING REMARKS:

Indonesian Ambassador to the UK and Rep. of Ireland, H.E. RIZAL SUKMA

LUNCHPANEL 3

MODERATOR: Minister Counselor of the Indonesian Embassy, Vitto Tahar

PANELISTS:

1. 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):

1. Government: BKPM, KPPIP, PUPR, and MSOEs, etc.

2. Project Owners: PT PJB, Hutama Karya, Jasa Marga, etc.

3. Pinsent Masons LLP.

PANEL 2

MODERATOR:

The City UK (name tba.)

PANELLISTS:

1. 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 1

MODERATOR:

Director IIPC London, NURUL ICHWAN

PANELLISTS:

1. 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

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

10.00 - 10.10 (10’) 10.10 - 10.20 (10’) 10.20 - 10.30 (10’)09.30 - 10.00 (30’)

13.00 - 14.00 (60’)

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.

10.30 - 11.20 (50’)12.10 - 13.10 (60’) 11.20 - 12.10 (50’)


Friday, 16 March 2018

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.

REGISTRATION KEYNOTE SPEECH:

Deputy Governor of Indonesian Central Bank (Bank Indonesia) - Economic Macro and Financial Policy on Infrastructure (tbc.)

O3M:

1. 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

PANEL 1

MODERATOR:

KPMG (name tba.)

PANELLISTS:

1. 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

MODERATOR:

Head of Indonesian Central Bank (Bank Indonesia) London Office, DONNY HUTABARAT

PANELLISTS:

1. Bank Mandiri: Role of Bank Mandiri in infrastructure funding in Indonesia

2. BNI: Role of BNI in infrastructure funding in Indonesia

3. KPMG

D. DRAFT AGENDA

12 13

10.00 - 10.10 (10’) 10.10 - 10.55 (45’) 10.55 - 11.40 (45’)09.30 - 10.00 (30’)

11.40 - 11.45 (5’)13.00 - 14.00 (60’) 11.45 - 13.00 (75’)

for any enquiries email to : iipc.london@investinindonesia · thursday & friday, 15 - 16 march...

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