Indonesia: Infrastructure Reform Sector Development Program (Subprograms 1, 2, and 3, and an Infrastructure Project Development Facility)

Evaluation Document | 15 January 2019

As a sector development program, it would introduce relevant reforms that would result in higher demand for and implementation of public–private partnerships (PPPs) across a range of sectors in Indonesia. The project loan would establish an infrastructure project development facility (IPDF), which would alleviate one of the most critical constraints impeding infrastructure development, namely, the lack of adequate project preparation. The IPDF would help the government prepare feasibility studies, adopt open and transparent bidding processes, and execute national and decentralized infrastructure projects. The policy-based loan had three single-tranche subprograms, which would be implemented at approximately 2-year intervals after the first subprogram.

ADB provided loans amounting to $880 million for all three subprograms. The World Bank and Japan International Cooperation Agency also provided parallel multi-year loans amounting to $850 million and $300 million, respectively. These agencies together contributed $2.0 billion, a small proportion of Indonesia’s infrastructure needs estimated at $56 billion (6% of GDP) a year in 2012. As a result of the reforms supported by the program, it was expected that substantial private sector investments and PPPs would follow.

This report validates the completion report's assessment of the program. IED overall assessment: Successful.