2022 State Budget and Fiscal Incentives Presentation
Government of Indonesia has stipulated Limited Concession Scheme
as an asset recycling scheme for brownfield infrastructure asset
2
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
900
ARR
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
Does LCS serve as privatization?
NO
It does not eliminate the ownership and control of
the Government
Government remains the owner of the
infrastructure asset
LCS limits "super-profits" for concession
holders
Government will receive upfront payment yet its
not selling the asset
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP)
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