1 The Role of The Role of PT. Sarana Multi PT. Sarana Multi Infrastruktur Infrastruktur in in Infrastructure Development Infrastructure Development Presented at Presented at “ “ Strategy for Developing Infrastructure PPP in Strategy for Developing Infrastructure PPP in Indonesia” Seminar Indonesia” Seminar Bali, 5 May 2009 Bali, 5 May 2009
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The Role of PT. Sarana Multi Infrastruktur in Infrastructure Development
The Role of PT. Sarana Multi Infrastruktur in Infrastructure Development. Presented at “Strategy for Developing Infrastructure PPP in Indonesia” Seminar Bali, 5 May 2009. OUTLINE. Background. Profile. Framework. Financing Policy. Challenges. Target. BACKGROUND. Rationale - PowerPoint PPT Presentation
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The Role of The Role of PT. Sarana Multi InfrastrukturPT. Sarana Multi Infrastruktur
in inInfrastructure DevelopmentInfrastructure Development
Presented at Presented at ““Strategy for Developing Infrastructure PPP in Indonesia” Strategy for Developing Infrastructure PPP in Indonesia”
1.1. Global economic conditionGlobal economic condition
2.2. The important role of infrastructure development as one of the stimuli of the economic growthThe important role of infrastructure development as one of the stimuli of the economic growth
3.3. Significant funding gapSignificant funding gap
4.4. Needs to support the infrastructure development Needs to support the infrastructure development
Follow Up:Follow Up:
1.1. The government has provided various strategies to attract private investors to finance the project The government has provided various strategies to attract private investors to finance the project with the issuance of the regulatory frameworks: with the issuance of the regulatory frameworks:
PT SMI establishment through the Government Regulation No. 66/2007 as amended by PT SMI establishment through the Government Regulation No. 66/2007 as amended by Government Regulation No. 75/2008 Government Regulation No. 75/2008
Infrastructure Financing Company through Presidential Regulation No. 9/2009 Infrastructure Financing Company through Presidential Regulation No. 9/2009
Draft Minister of Finance Regulation on Infrastructure Financing Company Draft Minister of Finance Regulation on Infrastructure Financing Company
Continuous improvement of the Law/Regulation on each sectorContinuous improvement of the Law/Regulation on each sector
2.2. Government will establish Guarantee Fund Company Government will establish Guarantee Fund Company
3.3. Coordination with multilateral institutions to raise fund Coordination with multilateral institutions to raise fund
4.4. Establishment of PPP CUEstablishment of PPP CU
•Multilateral Organization (World Bank, ADB, etc.)
•Private Funds
Third Parties:
•Public, private sector
•State Owned Enterprises
•Banking
•Local Government
•Multilateral Organization (World Bank, ADB, etc.)
•Private Funds
Benefits of the third parties involvement:
• Increase the capability of financial sources
• Increase the reputation & credit rating
• Absorb the expertise, experience & other resources
JVJV JVJV IIFF*IIFF*Founder:
•PT SMI
•ADB
•IFC
•DEG
•Other Private Sector Investors
Founder:
•PT SMI
•ADB
•IFC
•DEG
•Other Private Sector Investors
*Indonesia Infrastructure Financing Facility
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PROFILE
• To serve as a leading catalyst of the national infrastructure development acceleration
VISION
To become a strategic partner of the government in promoting and accelerating the infrastructure development growth in Indonesia.
To establish the synergy with the third parties, e.g. private institutions, banking, Local Governments, State Owned Enterprises, or multilateral organizations in order to increase the capacity of infrastructure fund
Investors:•Lenders•Local Investor •Foreign Investor •Multilateral•Private Sectors•Banking•Infrastructure Pool of Fund•PIP
Internal Capacity Building •Fund Management•Fund Raising•Development of the fee-based income, e.g.: Investment advisory
External Capacity Building•Identification of Infrastructure Project Priority •Inter-departmental Coordination•Partnership with other entities to form JVs specializing in the infrastructure financing •Direct financing to other legal entities, in the form of loan or equity•Partnership with other parties in the form of BOT or BOO•Socialization on the infrastructure financing activities
To enable PT SMI to be as flexible as possibleTo enable PT SMI to be as flexible as possible To enable PT SMI to be as flexible as possibleTo enable PT SMI to be as flexible as possible
To provide effective & useful products that can To provide effective & useful products that can be run on a commercial basisbe run on a commercial basis
To provide effective & useful products that can To provide effective & useful products that can be run on a commercial basisbe run on a commercial basis
Financing size, Financing size, coverage and tenorcoverage and tenor
Financing size, Financing size, coverage and tenorcoverage and tenor
• According to MoF Regulation (being According to MoF Regulation (being finalized):finalized):• Maximum equity participation from each Maximum equity participation from each LenderLender• Maximum equity portion at borrower siteMaximum equity portion at borrower site
• Infrastructure related project Infrastructure related project • Flexible tenor with appropriate grace periodFlexible tenor with appropriate grace period
• According to MoF Regulation (being According to MoF Regulation (being finalized):finalized):• Maximum equity participation from each Maximum equity participation from each LenderLender• Maximum equity portion at borrower siteMaximum equity portion at borrower site
• Infrastructure related project Infrastructure related project • Flexible tenor with appropriate grace periodFlexible tenor with appropriate grace period
PT SMI may support project in the following sectors:PT SMI may support project in the following sectors: Energy supplyEnergy supply Water/ waste servicesWater/ waste services TransportationTransportation TelecommunicationTelecommunication Oil/ GasOil/ Gas Road/ toll roadRoad/ toll road Other activities that impact positively on Other activities that impact positively on the development of basic infrastructurethe development of basic infrastructure
PT SMI may support project in the following sectors:PT SMI may support project in the following sectors: Energy supplyEnergy supply Water/ waste servicesWater/ waste services TransportationTransportation TelecommunicationTelecommunication Oil/ GasOil/ Gas Road/ toll roadRoad/ toll road Other activities that impact positively on Other activities that impact positively on the development of basic infrastructurethe development of basic infrastructure
• the terms will reflect the relevant risk profile , the terms will reflect the relevant risk profile , • flexible tenor, etc.flexible tenor, etc.
Loan: Loan: • the terms will reflect the relevant risk profile , the terms will reflect the relevant risk profile , • flexible tenor, etc.flexible tenor, etc.
Multilateral InstitutionsMultilateral Institutions Infrastructure Pool of FundInfrastructure Pool of Fund Private (PFI/PE)Private (PFI/PE) BUMN/BUMDBUMN/BUMD InsuranceInsurance Pension FundPension Fund Local/Foreign BanksLocal/Foreign Banks
SOE/SOE/LOCAL GOVTLOCAL GOVT JVJV
JVJV
SOURCE OF FUNDSOURCE OF FUND
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CHALLENGES
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1. Legal protection of investors1. Legal protection of investors 1. Legal protection of investors1. Legal protection of investors
3. Transparency of the procurement process3. Transparency of the procurement process 3. Transparency of the procurement process3. Transparency of the procurement process
4. Integration of donor aid, multilateral institutions and private sectors4. Integration of donor aid, multilateral institutions and private sectors 4. Integration of donor aid, multilateral institutions and private sectors4. Integration of donor aid, multilateral institutions and private sectors
5. Involvement of domestic players, investors, banking, lenders and 5. Involvement of domestic players, investors, banking, lenders and commercial participants commercial participants
5. Involvement of domestic players, investors, banking, lenders and 5. Involvement of domestic players, investors, banking, lenders and commercial participants commercial participants
6. Resistance from vested interest6. Resistance from vested interest 6. Resistance from vested interest6. Resistance from vested interest
• Business and policy rationale for concession• Sustainable cash flow• Incentives for equity to perform • Mitigation of completion risk• Mitigation of environmental impacts
• Business and policy rationale for concession• Sustainable cash flow• Incentives for equity to perform • Mitigation of completion risk• Mitigation of environmental impacts
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TARGETTARGET
• Identification on infrastructure project priorityIdentification on infrastructure project priority• Inter department/ related parties coordinationInter department/ related parties coordination• Partnership with banking, multilateral/private sector investors:Partnership with banking, multilateral/private sector investors: • Establishment of IIFF/JVs together with multilateral institutions Establishment of IIFF/JVs together with multilateral institutions • Socialization activities Socialization activities • Project Financing ExecutionProject Financing Execution
• To promote Infrastructure Revolving Fund/ Pool of Fund through To promote Infrastructure Revolving Fund/ Pool of Fund through partnership with multilateral/ private sector investorpartnership with multilateral/ private sector investor• To facilitate & promote creation of sustainable finance for To facilitate & promote creation of sustainable finance for infrastructure projectinfrastructure project• To facilitate & ensure a supportive regulatory frameworkTo facilitate & ensure a supportive regulatory framework
• To increase the size of capability to financing the projectTo increase the size of capability to financing the project• To extend the role of the company as one of the agencies To extend the role of the company as one of the agencies of the Government to promote infrastructure developmentof the Government to promote infrastructure development• Ultimately, to improve the growth of infrastructure developmentUltimately, to improve the growth of infrastructure development
Short TermShort Term
Medium TermMedium Term
Long TermLong Term
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CONTACT DETAILCONTACT DETAIL
For further information, please contact us at the following address:For further information, please contact us at the following address:
PT Sarana Multi Infrastruktur (Persero)PT Sarana Multi Infrastruktur (Persero)
Gedung BRI II, Floor 29Gedung BRI II, Floor 29thth- Suite 2905- Suite 2905
Jl. Jend. Sudirman Kav. 44-46 Jakarta 10210Jl. Jend. Sudirman Kav. 44-46 Jakarta 10210