Public - Private Partnerships in Infrastructure (Guarantee Fund)

With a view to increasing the participation of the private sector in the development of infrastructure projects the government has issued Regulation No. 35 of 2009. The government has set up a guarantee fund which is designed to reduce the risks of private participation in infrastructure developments.

Essentially, the regulation sets out that the government can inject capital for the purposes of establishing a company with a guaranteed fund. Simply, the government capital participation is designed to offset some of the risks of investment in the infrastructure sector.

The capital participation is to be sourced from the 2009 State Budget and can be a maximum of IDR 1 trillion.

The provisions of Government Regulation No. 41 of 2003 as they relate to the delegation of authority do not apply for companies established under the provisions of this regulation. Therefore, the primary authority is the Minister of Finance and not the State Minister of State-Owned Enterprises.

Companies are to be established under this regulation based on the provisions of the prevailing laws and regulations in this sector.

The regulation has been in force since 5 May 2009.