Viability Gap Fund



Feasibility Support is Government Support in the form of a fiscal contribution of a financial nature in the form of a contribution to a portion of the construction costs provided to a Cooperation Project that already has economic feasibility but does not yet have financial feasibility

Feasibility Support is State Expenditure provided in cash to Cooperation Projects for a certain portion that does not dominate the entire Cooperation Project Construction Costs other than costs related to land acquisition; and tax incentives. Regional Governments can contribute to providing Feasibility Support after obtaining approval from the DPRD.

Feasibility Support can be provided after there are no other alternatives to make the Cooperation Project financially feasible.

1. Legal basis

PMK 223 of 2012 concerning Providing Feasibility Support for Part of Construction Costs in Government Collaboration Projects with Business Entities in Providing Infrastructure

PMK 170 of 2018 concerning Amendments to Minister of Finance Regulation Number 223/PMK.011/2012 concerning Providing Feasibility Support for Part of Construction Costs in Government Cooperation Projects with Business Entities in Providing Infrastructure

2. Objective
Increasing the financial feasibility of Cooperation Projects so as to generate interest and participation of Business Entities in Cooperation Projects;

Increase certainty in the procurement of Cooperation Projects and procurement of Business Entities in Cooperation Projects according to the planned quality and time and realize public services available through infrastructure at rates affordable to the community

3. Project Criteria

  • The Cooperation Project has met economic feasibility but has not yet met financial feasibility;
  • Cooperation Projects apply the user pay principle;
  • The total investment cost of the Cooperation Project is at least IDR 100 billion;
  • The Business Entity is determined by the Person in Charge of the Cooperation Project (PJPK) through an open and competitive auction process;
  • There is a scheme to transfer assets and/or their management from the Business Entity to the GCA at the end of the cooperation period;
  • Feasibility Support is provided to Cooperation Projects in terms of:
    • A comprehensive pre-feasibility study has been prepared;
    • The pre-feasibility study lists optimal risk sharing;
    • The pre-feasibility study concluded that the project was technically, legally, environmentally, and socially feasible; And
    • The pre-feasibility study shows that the Collaboration Project becomes financially viable if Feasibility Support is provided.

 

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