Indonesia's COVID-19 Vaccination and Economic Resilience Strategy
Government of Indonesia has stipulated Limited Concession Scheme
as an asset recycling scheme for brownfield infrastructure asset
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Limited
Concession
Scheme (LCS)
Limited Concession Scheme (LCS) is a concession agreement, that includes asset operations and
development, between Government and Private Entities for 20+ years of concession period.
LCS Concept
060
AGA
Government can get:
+
•
+
Upfront payment that can be received at the
time of Financial Close, and/or
Annuity payment during the concession period
Additional incentives in the form of
revenue sharing
All future CAPEX will be borne fully by the
concessionaire, thus easing the burden of
Government's budget
Government guarantees the issuance of
permits and licenses
Flexible operations allow private sector to
innovate and increase revenue
LCS Principles
LCS transfers concession rights from brownfield asset
owned by the Government and/or SOES to private sector to
operate, maintain, and develop the assets;
As the rewards, Government and/or SOE will receive upfront
payment or annuity payment during the concession period
Future CAPEX during the concession period will be borne
by the concession holder to ease the Government and SOE
budget burdens
Technical Criteria for the LCS assets
The asset has been fully operated for minimum 2 years
The asset needs to improve operation efficiency based on international
standard
Asset's useful life minimum is 10 years
For the SOE's asset, the asset must have positive cash flow for minimum 2
years in a row and has been audited at least 3 years in a row
For Government asset (BMN), the asset should be on the Ministry Financial
report that has been audited based on the Government Accountancy Standard
in the previous period
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)
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