IIGF Gives Government Guarantee to the Jatiluhur 1 Water Supply System PPP Project

19 FEBRUARY 2021

Jakarta, 19 February 2021 - Indonesia Infrastructure Guarantee Fund / IIGF - one of the Special Mission Vehicles (SMV) of the Indonesian Ministry of Finance - is always committed to supporting the Government's efforts to accelerate the development of infrastructure projects. In the current situation, the availability of infrastructure, especially those related to health, drinking water and sanitation, is expected to contribute to overcoming the impact of the COVID-19 pandemic, apart from being an effort to restore the national economy.

On Friday (18/02), IIGF carried out an online ceremonial activity signing an agreement related to government guarantees for projects with the Unsolicited Public Private Partnership (PPP) scheme in the Drinking Water sector, namely the Jatiluhur I Drinking Water Supply System (SPAM). This signing was carried out by IIGF as an Infrastructure Guarantee Business Entity with the Ministry For Public Works and Human Settlements as the Person in Charge for the Cooperation Project (Contracting Agency) in the Regress Agreement and with PT Wika Tirta Jaya Jatiluhur (Consortium of PT Wijaya Karya (Persero) Tbk, PT Jaya Konstruksi Manggala Tbk. , and PT Tirta Gemah Ripah) as the Implementing Business Entity (BUP) in the Guarantee Agreement related to the Project.

The Jatiluhur 1 Regional Water Supply Project is a project for the construction and operation of a Water Supply System with a capacity of 4,750 liters / second implemented under the PPP scheme for a cooperation period of up to 27.5 years after the Commercial Operation Date (“COD”) which will supply needs in the DKI area. Jakarta, Bekasi Regency, Bekasi City and Karawang Regency. The project is estimated to be able to serve ± 380,000 Subscription Lines (SL).

The additional economic benefits that are expected to be generated in this project are divided into two components through direct benefits from the project, namely increasing the coverage of clean water in the city of Jakarta to 4,000 liters per second, Bekasi City by 300 lpd, Bekasi Regency by 100 lpd and Kabupaten Kerawang by 350. lpd, reduce dependence on groundwater use and prevent land subsidence, create employment opportunities through an investment of IDR 1,675 trillion and help prevent the spread of Covid-19 by providing clean water for washing hands. Then for indirect benefits, there are health benefits through the impact of improving the quality of water received by customers such as a reduction in morbidity / mortality from diseases caused by poor water quality.

The Minister of Finance, Sri Mulyani, who was present in his speech, stated that the Ministry of Finance has provided various forms of support through fiscal tools as part of the Government's efforts to accelerate the provision of infrastructure for PPP schemes such as the Viability Gap Fund (VGF) / Feasibility Support, and Projects. Development Facility (PDF) and Government Guarantee. In this Jatiluhur I Regional SPAM project, the Ministry of Finance provides facilities in the form of Government Guarantee through IIGF as the Ministry of Finance's SMV.

"The facilities provided by the Government through the Ministry of Finance are expected to accelerate infrastructure development, not only for the Jatiluhur I Regional Water Supply System project, but also for other infrastructure projects so that infrastructure development will continue even in the midst of the current global pandemic, and the more and more widespread the benefits that can be felt by the community, "explained Sri Mulyani.

President Director of IIGF M. Wahid Sutopo stated that IIGF as SMV of the Ministry of Finance has provided guarantees for the project for 15 years to guarantee the risk of default and termination.

"Thank you to the Ministry of Finance, Ministry For Public Works and Human Settlements and PT Wika Tirta Jaya Jatiluhur for entrusting the government guarantee scheme through IIGF. The Jatiluhur I Regional SPAM Project is the 32nd project to receive a guarantee scheme from IIGF and the 5th Water Supply System Project after Umbulan Water Supply System, Bandar Lampung Water Supply System, West Semarang Water Supply System and Pekanbaru Water Supply System. It is hoped that this guarantee scheme will add confidence for investors and financial institutions to participate more actively in infrastructure development, ”Sutopo concluded.

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