ADB and Indonesia's SMI sign MOU to advise on PPPs

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ADB and Indonesia's SMI sign MOU to advise on PPPs

The Asian Development Bank (ADB) and Indonesia's PT Sarana Multi Infrastruktur (PT SMI) signed last week memorandum of understanding (MOU) to co-advise on public-private partnerships (PPPs).

The MOU is the first co-advisory framework arrangement between ADB and an Indonesian infrastructure group. It will help speed up the delivery of private sector funding to critical infrastructure projects by structuring viable and bankable projects through transaction advisory services. It was signed by Steven Tabor, Country Director for Indonesia for ADB, and Emma Sri Martini, President Director, for PT SMI.

Mr. Tabor said:

"PT SMI has proven leadership in infrastructure financing in Indonesia. Bringing together PT SMI's local experience and ADB's global expertise on PPPs will help structure better deals and deliver more value to the public."

PT SMI, which is fully owned by the Government of Indonesia, plays an active role in generating infrastructure finance, as well as preparing infrastructure projects and providing advisory services. It supports the government's infrastructure development agenda through PPP projects.

Under the terms of the MOU, PT SMI and ADB will, together, provide independent advice to governments at all levels on PPPs. The partnership will allow them to work together to help public sector entities structure PPPs so they are attractive to the private sector, and to manage the subsequent PPP bidding process. They will also help Indonesian public sector clients assess future income flows of projects, bring international best practices to PPPs, and develop PPP capacity across the country.

ADB has supported the efforts of countries in the region to improve their PPP frameworks for some time. On 1 September 2014, ADB formally established the Office of Public-Private Partnership to provide independent transaction advice on specific deals and to help countries improve their PPP knowledge and legal and regulatory frameworks. Since then, ADB has signed an advisory mandate with the Philippines Department of Transportation and Communications for the $3.8 billion North South Railway Project South Line, the largest PPP project to be tendered in the Philippines to date, and it has also embarked on a landmark co-advisory program with 8 leading global project finance banks.

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