The Asian Development Bank (ADB) and the Government of Indonesia have signed a memorandum of understanding to partner up in promoting public-private partnerships in the transport sector. ADB will provide strategic advisory services to support the Ministry of Transportation (MOT) in screening and preparing transport projects for delivery through PPP. ADB will also support the delivery of a tailored PPP capacity building program for MOT.

The agreement was signed at a ceremony in Jakarta by Bapak Sugihardo, MOT Secretary General, and Winfried Wicklein, ADB’s Country Director for Indonesia. Transportation Minister Budi Karya Sumadi and ADB Vice-President for Knowledge Management and Sustainable Development Bambang Susantono witnessed the signing ceremony.

Indonesia’s transport sector faces serious challenges with respect to improving physical connectivity, which includes improving critical hard infrastructure projects crucial for increased logistics and transport efficiency. Significant investment including from private sector is needed to improve the competitiveness of the state of transport infrastructure.

Indonesia is a founding member of ADB, and has approved US$32.7 billion in sovereign and non-sovereign loans and US$894.02 million in technical assistance and grants to the country. Transport-related programs make up around US$3.7 billion, or 11%, of total ADB assistance to Indonesia to date.

Mr. Wicklein, ADB’s Country Director for Indonesia, commented:

“PPP is an important instrument to deliver infrastructure in Indonesia, and ADB is looking forward to assisting the government in developing priority transport projects that could be structured on a PPP basis to mobilize private capital flows,”