Indonesia Infrastructure Guarantee Fund

The Indonesia Infrastructure Guarantee Fund (IIGF) was created in 2009 by the Indonesian Ministry of Finance as a state-owned enterprise to improve the creditworthiness and quality of public–private partnerships (PPP) for infrastructure projects in Indonesia.

IIGF provides guarantees for one single or several financial obligations of a public contracting agency that participates in a PPP consortium. If the economic feasibility of the PPP project is disturbed due to perils caused by the public contracting agency, IIGF will provide compensation.

Covered risks include:

• Inability and unwillingness of the public contracting agency to pay.
• Early termination or project default due to government action/inaction such as: changes in law, expropriation, currency inconvertibility and non-transfer, force majeure affecting the contracting authority.

Eligible infrastructure sectors: Transportation and road infrastructure, water infrastructure, centralized and local wastewater management systems, waste management infrastructure, telecommunications/information and communications technology (ICT), electric power infrastructure, energy supply and distribution, energy conservation infrastructure, urban facilities, residential infrastructure, tourism infrastructure, social infrastructure (including schools, sports and art facilities, hospitals, prisons).

Infrastructure projects need to be structured as a PPP based on criteria stipulated in Presidential Regulation No. 38 Year 2015 on Cooperation Between Government and Business Entities in infrastructure Provision.

Indonesia

• Size of coverage: Financial obligations of the public contracting agency involved in the PPP.

• Costs: The private parties in the PPP consortium will have to pay these fees:

  • One-time fee: Based on project value, risk profile, guarantee coverage and period
  • Recurring fee: Based on maximum exposure guarantee

http://www.iigf.co.id/en/business/overview