Bank Indonesia Policy Mix

Efforts to Accelerate Infrastructure Provision Limited Concession Scheme as an Alternative of Infrastructure financing Presidential Regulation No 32/2020 about Infrastructure Financing through Limited Concession Scheme Definition Limited Concession Scheme of Infrastructure Asset is the asset concession agreement to improve operations of Government assets (BMN) and/or SOEs' assets to generate revenue to improve similar project operations and/or finance other infrastructure provision Infrastructure Financing Priority Revenue generated by the LCS will be used to fund the priority infrastructure projects and/or national strategic infrastructure projects Several adjustments on the substance of Presidential Regulation Number 32/2020 will be conducted, by considering the uncertainty conditions of the assets affected by COVID- 19 pandemic which causing the LCS quite difficult to be implemented. Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) 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 170

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