Strengthening financial policies: Credit guarantee is known to de-risk the infrastructure projects. How does the CIPP recommend expanding the credit guarantee mechanism in the context of JETP?
The existing policies on guarantee mechanisms govern PPP infrastructure projects. As stipulated in Perpres No.13/2010, GoI may provide fiscal and non-fiscal supports, as well as guarantee through IIGF (the Indonesia Infrastructure Guarantee Fund/ PT PII).
The CIPP recommends additional policy support for: (i) the expansion of the existing guarantee coverage from infrastructure projects to include renewable energy (IFA# 3 and IFA #4), to facilitate retirement of CFPPs and managed phase-out (IFA #2), (ii) the expansion of IIGF's role to provide credit guarantee beyond the PPP projects, and (iii) exploration of other sources of credit guarantee providers.