DE-RISKING INFRASTRUCTURE PROJECTS:Challenges for attracting global financial resources,
learning from Indonesia toll road development

Danang Parikesit
PROFESSOR, UNIVERSITAS GADJAH MADA, INDONESIAHEAD, THE INDONESIA NATIONAL TOLL ROAD AUTHORITYMINISTRY OF PUBLIC WORKS AND HOUSING, INDONESIA
CO-CHAIR T20 INDIA, INFRASTRUCTURE FINANCE WORKSTREAM

Tokyo, 02.02.2023

2022 SUMMARY
Operational Toll Road

2.599 KM

The Toll Road Business Entity

47Toll Road

69 TOLL ROADSEVOLUTION INThe Indonesia toll road business

TRANSFORMATIONCREATING ADDED VALUESINNOVATIONTECHNOLOGY, FINANCING, RISK ALLOCATIONPROJECT DE-RISKING
IS THE KEY TO ATTRACTPRIVATE CAPITAL FOR
INFRASTRUCTURE PROJECTS

MODERNIZATIONUSER EXPERIENCE, ASSET MANAGEMENT

2,599 KM (2022)
NO MORE OLDFASHIONED THINKING

HOW WE DEFINE RISKS?
NATIONAL/GLOBAL RISKS?
PROJECT RISKS?

JMSR AS OPERATOR
AND REGULATORINITIATION+/- 18,000 KM

WE NEED TO CHANGE !!

780 KM (2014)

ACCELERATIONCONSOLIDATIONCMNP as a New player, 1987

1978-2005

2005-2014

Indonesia Toll Road Authority, Ministry of Public Works and Housing

2014-20192019-2024CIKAMPEK UTAMA TOLL GATE 2020-2021(MONITORING AND ANALYTICS – IMPACTS OF PANDEMIC)

Eid Al-Fitr (24-25 Mei)
Emergency Determination
PSBB Transisi DKI Jakarta (4 Juni)(31 March)
Independence Day(17 Agt)
- Ketupat Operation
Prevention Protocol
Birthday of the2020 Ends on Toll Road
Islamic New
on Toll Roads
Prophet- Japek II Elevated Toll
Year(20 Augt)(2 April)MuhammadRoad opens (7 June)(28 Oct – 1 Nov)
DKI Jakarta PSBB (10 April)
DKIJakarta
PSBB
Eid Al-Adha
West Jawa PSBB (15 April)(14 Sept)(31 July)

Christmast(24-25 Des)New Year 2021
(31 Des 20-1 Jan 21)

Isra Miraj Prophet
Muhammad(11 Mar 21)

Lunar New Year
(12 Feb 21)

Eid Al-Fitr(13-14 May 21)

Good Friday(2 April 21)

Emergency PPKM
(3 July-2 Augt 21)

Homecoming Ban (April 21)- Transportation Control- Closure of Japek II Toll Road
Elevated- Operation’s Ketupat(23-24 April)

PREDICTIONINOUTVOL OF HEAVY VEHSHEAVY VEHICLESEid Al-Adha(20 July 21)

EXPOSURES OF NEW KNOWLEDGE
Teleworking, (very) flexible working hours, solidarity with society's socialconditions
Contactless Interaction: human-human, human-equipment, human-environment
Consideration of new risks, better more equitable risk allocation
Importance of government policies to combine mitigation and adaptation
Creative financing to better manage cashflows
Utilization of mobile applications for a better driving experienceBUILDING BLOCK TOLL ROADS FINANCING INNOVATIONLAND FINANCINGAVAILABILITY OF LANDFINANCING FOR PSNState Asset Management Agency
Financing cost of bailout fund

EQUITY FINANCINGLOAN FINANCINGRISK FINANCING

CAPITAL AVAILABILITY IN THE
TOLL ROAD SECTOR:(BROWNFIELD)JUNIOR LOAN /MEZZANINE/
SUBORDINATE DEBT
Cash Deficiency Support
Supply Chain Financing
Takeout loan financing (privatebank/international)
Extended Turnkey + finance

RISK GUARANTEESECTOR/RESIDUAL RISK
Network integration risk/tariff
rebalancing
Toll Road revenue reconciliation
Growth Cost
Covid-19 Pandemic
Compensation

SENIOR LOAN

PROJECT RISK GUARANTEE

Reprofiling Loan
Project Finance Loan

Land Acquisition Guarantee
Tariff adjustment Risk

Asset Recycling
Exploration of Capital MarketExpansion of source of equity(eg: Syariah Compliance)

Sovereign Wealth Fund
Corporate / RetailAVAILABILITY OF LANDFINANCING FROM GOVT
Budget Implementation List
Directorate General of Highway
INDEPENDENT LANDFINANCING FROM TRC
Part of investment cost

CAPITAL IN PROJECT(GREENFIELD)
PMN and VGF/Construction
SupportSupport for JTTS
CPF/SCF/Strategic AllianceFund as majority of company holder
in construction period
exit guarantee financing/VC/PE-Fund

Indonesia Toll Road Authority, Ministry of Public Works and HousingTraffic Control
Room

W FE: W ork From
Everywhere

Bridging a healthy andstructured m onitoring system

AI: to detect and predict roadsurface defectsTOLL ROAD MANAGEMENTSuper Appfor toll road users

Vehicle em ission
detector

Overloaddetector

Design approval andconstruction process

Service levelcom pliance

M EDIVAC
Air Evacuation

Electronic Traffic Law
Enforcem ent

6

CLOSING REMARKS• Indonesia has gone through various stages in the toll road development, it iscurrently the champion of PPP projects for the country• The Indonesian NTRA model has been successful in managing expectations of thepublic sector and private sector interests, and should continue to play such a role
• For toll roads, Covid-19 is not the cause of the declining demand and thus
revenue; government policies are.
• Government needs to recognize “new risks” in toll road development at both
macro level (global/national) and project level, and should develop an appropriate
mitigation and adaptation strategy• Innovation will be the keyword for sustainability in the toll road infrastructurebusiness – learning is a part of the success• Covid-19 pandemic should be seen as a momentum for accelerated innovation:
finance, technology, value creation, and governance