Infrastructure guarantee is a guarantee given on GCA’s financial obligation to pay compensation to the project company in the occurence of infrastructure risks which has become GCA’s responsibility based on risk allocations agreed in the PPP agreement. Infrastructure guarantee is implemented by IIGF as a single window policy. If the guarantee coverage exceeds the capacity of the IIGF, it will be carried out as co-guarantee by the Ministry of Finance and IIGF.
- Ensures financial close successfulness as well as potential improvement in tenor, interest, and/or financing terms.
- Ensures GCA’s performance to meet its obligations.
- Enhance the investor’s and lender’s confidence and comforts.
PPP project that eligible to get the guarantee are:
- Comply with the rules stated in Presidential Regulation No.38 of 2015.
- Comply with the sectoral regulations and through a transparent and competitive bidding process.
- Feasible in terms of technical, economical, legal, environmental, and has no negative impact on social aspects
- Perform the feasibility sstudy by using the services of independent and professional consultant.
- Have binding arbitration provisions in the PPP agreement.
The legal basis for infrastructure assurance facility in Indonesia is based on:
- Presidential Regulation No. 78 of 2010 on Infrastructure Guarantee Facility of PPP Projects that’s Conducted Through Infrastructure Guarantee Fund
- Minister of Finance Regulation No.260/PMK.011/2010 on Implementation Guidelines of Infrastructure Guarantee in Public-Private Partnership.
- Minister of Finance Regulation No. 8/PMK.08/2016 on The Amendment of Regulation No. 260/PMK.011/2010