Presentation Material Public-Private Solution Sandbox: SDG INDONESIA ONE – Blended Finance Platform Fakhrul Aufa Team Leader Business Development and Strategic Partnership PT SMI (Persero) - Indonesia AVPN Virtual Conference 2020 Jakarta June 2020
What is PT SMI’s Key Value Proposition? National Strategic Partner in channeling grant, soft loans, technical assistance, and capacity building Unique Municipal Financing Product Proven Track Record as to Support Financial Institution Regional Development Providing End to End Creating solution by having 3 Innovative Business Pillars to Product to Close support SDG & Climate The Gap Resilience Trustworthy Institution with Strong Support From The Government & International Strategic Partners (Donor, Philanthropist, Climate Fund, Development Bank, Institutional Investor) PT Sarana Multi Infrastruktur (Persero) | 2
Vision of PT SMI to become “ The Lead Catalyst for Acceleration of National Infrastructure Development ” Market Maker Development Partner Become a development Participate in filling the partner that strengthens the financing gap development capacity and capability of sector and create a government stakeholders crowding in effect Market Development Maker Partner LEAD CATALYST FOR ACCELERATION OF NATIONAL INFRASTRUCTURE DEVELOPMENT Ecosystem Sustainability Enabler Promoter Ecosystem Enabler Sustainable Development Strengthening the Promoter ecosystem of development Support the creation of financing supported by sustainable development policies and regulations and industry knowledge PT Sarana Multi Infrastruktur (Persero) | 3
Blended Finance and SDG Indonesia One: Transforming Needs into Opportunities Blended finance is “the strategic use of development finance for the mobilization of additional finance towards sustainable development in developing countries“ (OECD)* Public Private/Donor/Philanthropist Gain access to rapidly growing markets in 1 Mobilize private Indonesia 1 investments to tackle sustainability Mitigate exposures issues (poverty, and accelerate climate change, 2 implementation by infrastructure, etc.) engaging PT SMI as a local strategic partner Increase access of financial resources 2 Take advantage of to finance the risk mitigation 3 development measures offered by blended finance Reducing fiscal Leverage financing burden to support 3 capacity and the SDG related 4 socio-economic projects outcome Integrated Platform Maximizing Impact Mitigates Risk Creating Leverage PT Sarana Multi Infrastruktur (Persero) | 4 *Source: OECD Principle of Blended Finance
SDG Indonesia One Provides End-to-End Financing Support to Project Development Investor Donor, Impact/Climate Commercial Banks Donor (Philanthropist) Institutional Investor Funds and and Impact/Climate and Institutional and Developer Development Banks Funds Investors Contributions Contributions: Contributions: Contributions: Contributions: Grant, Technical Assistance Concessional Loan, Grant Loan, Bond, Sukuk Equity Objective: Objective: Objective: Objective: Pre-construction project Project de-risking Construction / post- Investment in high impact / development support (improving bankability) construction finance new frontier SDG sector SDG Indonesia One (Managed by PT SMI) SDG De-Risking SDG Financing SDG Equity SDG Development Product Facilities Fund Facilities Facilities Concessional Loan, First- Grant (Project Preparation, Equity, Equity-Linked Senior Loan, Loss Facility, Interest Technical Assistance, Investment Subordinated Loan Subsidy, Guarantee Premium Research) Subsidy, VGF etc. SDG Projects PT Sarana Multi Infrastruktur (Persero) | 5
SDG Indonesia One Highlight As of June 2020 SDG Indonesia One Achievements SDG Indonesia One Commitment Rehabilitation and 1 Reconstruction Program after Natural Disaster In Central Sulawsi USD 2 RIDF Financing for 32 RSUD & RSK Mata 3.03 2 North Sulawesi 1 partners Billion 3 RIDF Financing for 5 3 Traditional Market Banjar Baru City 4 6 Developing Project 4 SDG Indonesia One Commitment Concept Solar PV Rooftop Based on sector and no of program in West Java 5 Technical Assistance FS Multisectors PJU (“public street Activities SDG Center Activities with lighting”) Project 3 10 8 1 with University = 3 SIO Partners = 10 Bengkulu Green Technical Assistance FS 6 W-t-E Plant Putri Cempo 1 8 1 1 1 SDG Indonesia One Impacts Solo Water 1 101 temporary shelters & • Study of 5 MWp dan 7.48 MW 218 permananet shelters for the enew able energy pow er Health plants w ith the potential saving of for 1.430 families 1 Perumahan ± 1.5 M / year; Renewable ( 5.780 people ) Umum • Energy Emissions reduction potential Social Infrastructure 550 beds and total ± 5.867 tCO 2 e p/ year 2 area of hospital ± 47.535 m2 Waste management 0% 20% 40% 60% 80% 100% potential ± 365.000 An increase in market ton / year Education area 15.400 m2 Equity Financing Technical Assistance 4 schools w ith 31 2.000 families and 172 kiosk; De-risking Grant Potential Project classes for 716 get access to clean Social 1 w orship place Multifacilities w ater students Infrastructures *) Based on USD currency exchange as June 2020 PT Sarana Multi Infrastruktur (Persero) | 6
Example of SDG Indonesia One (Development Facilities): Reconstruction and Rehabilitation in Vulnerable Communities and Disaster Areas: Palu, Sigi and Donggala, Central Sulawesi Province Structure and Cooperation Scheme Construction of Temporary Settlement Government Budget Donor/Philanthropist Cooperation Special Agreement Allocation Clean Water Fund Treatment Plant Mosque Social Infrastructure Reconstruction Reconstruction Expenditures for Masjid Babul Khairaat medical devices MTs Alkhairaat Baluase Project AnutapuraPalu City City of Reconstruction Public Hospital Palu School Reconstruction Housing MA Alkhairaat Batusuyu Go’o - SD Alkhairaat (Temporary Shelters & Tondo – Permanent Housing) MTs Nurul Khasanah Pengawu Facilities Installation of clean water Impacts for Anutapura Local treatment plant Hospital Providing 100 Patient Beds , Eye Polyclinic Device (Autorefractometer), Dental Unit, Air Conditioners, Genset and Electrical Network, as well as other supporting devices for Anutapura Public Hospital Providing reconstruction of 4 schools with 31 classes for 716 students Providing clear water with the capacity of 10liters/second for serving 2,000 household. • Providing 101 temporary settlement for 1,212 households or ± 4,608 people and 300 university students • Providing 218 permanent housing for ± 872people Combination of Government and Private Funds with the Blended Finance Scheme 7 can be used for Infrastructure Development in Disaster Areas
Example of SDG Indonesia One (Development Facilities): Project Screening Tools for Renewable Energy Power Plant Projects Collaborative Structure and Schemes Activities Required for Project Screening Tools Defining Project Screening Tool Cost Sharing • Setting basic criteria/1st stage requirement to Basic Criteria be used as preliminary/selection tools to screen project proposal received by UNDP Development Climate Donor Bank Fund • Setting standard project parties, documentation and bankable terms and conditions Standard UNDP SDG Indonesia One Platform Documentation • One on One Meeting and/or FGD to finalize the Technical Assistance for Project Screening Tools basic criteria, Standard Project Parties, (Role of Advisory team of PT SMI) FGD Documentation and Bankable Term & Conditions. • Select and evaluate submitted documents from project sponsor based on basic criteria in Evaluation Preparation stage. Loan 7 Renewable Energy Power Plants Lenders • Perform additional analysis such as stakeholder discussion, additional support Finalization required, etc. in accordance with bankability criteria stated by potential lenders. Provide the Bankable Projects of Renewables Energy that is ready to be Financed by Lenders 8
Example of SDG Indonesia One (Development Facilities): Regional Infrastructure Development Fund: Hospital Project North Sulawesi Regional Hospital (Type B) Eye Center Hospital North Sulawesi Loan Loan USD USD 100 100 million million Role Project preparation & financing Role Project preparation & financing Project IDR 3,164,840,000 using SECO Two-Step-Loan Project IDR 2,918,498,000 using SECO USD 200 million Preparation grant to construct DED & Grant Preparation grant to construct DED & USD 3 million environmental documents environmental documents Financing Commitment: IDR 300 billion Financing Commitment: IDR 100 billion Tenor 5 years Tenor 5 years Interest rate: 9.4 % per annum Interest rate: 8.53 % per annum • Improving the services, health facilities and infrastructures in • Improving the quality of eye- North Sulawesi Province Technical health services to the Municipal Loan • Assistance Supporting the provision of tiered- community Benefits health services and referrals since Benefits • North Sulawesi province has not Reducing the prevalence of Municipal got an adequate and easily- high blindness in North Government accessible provincial referral Sulawesi hospital (type B). 9
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