Indonesia: Infrastructure Reform Sector Development Program (Subprogram 2)

Sovereign Project | 40009-033


ADB is helping Indonesia improve the investment climate to encourage private sector participation in infrastructure development. Subrprogram 2 of the project will continue to support reforms in the infrastructure sector by removing bottlenecks and increasing access to infrastructure services. It will also help facilitate the preparation of public-private partnerships.

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Project Name Infrastructure Reform Sector Development Program (Subprogram 2)
Project Number 40009-033
Country Indonesia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2475-INO: Infrastructure Reform Sector Development Program (Subprogram 2)
Ordinary capital resources US$ 280.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Energy - Energy sector development and institutional reform

Information and communication technology - ICT strategy and policy, and capacity development

Transport - Transport policies and institutional development

Water and other urban infrastructure and services - Urban policy, institutional and capacity development

Gender Equity and Mainstreaming No gender elements
Description The IRSDP, of which subprogram 2 is an integral part, aims to improve Indonesia's overall investment climate by removing infrastructure bottlenecks and increasing access to infrastructure services
Project Rationale and Linkage to Country/Regional Strategy
Impact The objective is to enhance infrastructure provision and access and thereby strengthen the investment climate, which will help realize the Government's medium-term macroeconomic goals, particularly in achieving an average annual GDP growth of 6-7% during 2005-2009. The expected outcome of the IRP is accelerated infrastructure development through large-scale PSP and increased public sector spending
Project Outcome
Description of Outcome

The pogram loans have three key reform pillars to support:

I. Strategic Cross-Sector Reforms, resulting in:

(a) Improved policy, legal and institutional framework for grater PSP that is anchored on good governance principles; (b) Well structured risk management framework that promotes PSP; and (c) Accelerated mobilization of domestic long-term financial resources for infrastructure development and the establishment of innovative funding mechanisms to finance PPP transactions and 9d) Streamlined regional autonomy framework, clearly delineating functional responsibilities between national and local governments in infrastrcuture provision.

II. Sector-Specific Policy, Legal, and Institutional Reforms, leading to:

(a) Improved financial soundness and sustainability of infrastructure services through full cost recovery; (b) Gretaer competition that benefits the consumers through improved service delivery and lower tariffs; (c) Independent regulatory structures that are distinct from the contracting and operating functions; 9d) A level playing field between different actors and the prevention of abuse of natural monopoly rights and (e) Fulfillment of the PSOs of infrastructure service providers, in line with the Government's poverty reduction objectives.

III. Preparation and implementation of well-structured project transactions, resulting in sound model PPP projects that can be replicated

Progress Toward Outcome
Implementation Progress
Description of Project Outputs The implementation of the IRP program cluster is likely to significantly accelerate public and private investments in infrastructure. By 2009, the program cluster will help the Government to boost the ratio of infrastructure investments from 2% of GDP now to 5% by 2009. In addition, at least about 40 sound PPP projects will be processed for bidding, in turn generating $20 billion in new investments by 2009.
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Not required
Procurement Not required
Responsible ADB Officer Rehan Kausar
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
National Development Planning Agency (BAPPENAS)
Jl. Taman Suropati No. 2
Jakarta 10310
Concept Clearance 10 Jan 2005
Fact Finding 08 Apr 2008 to 29 Apr 2008
MRM 01 Sep 2008
Approval 27 Nov 2008
Last Review Mission -
PDS Creation Date 01 Dec 2008
Last PDS Update 20 Mar 2009

Loan 2475-INO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2008 10 Dec 2008 18 Dec 2008 31 Mar 2009 - 18 Dec 2008
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 280.00 Cumulative Contract Awards
ADB 280.00 27 Nov 2008 280.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 27 Nov 2008 280.00 0.00 100%

Safeguard Documents

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Evaluation Documents

See also: Independent Evaluation

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