Project Name Polytechnics Education Development Project
Project Number 42099-013
Country Indonesia
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Loan 2928-INO: Polytechnic Education Development Project
Ordinary capital resources US$ 75.00 million
Grant 0343-INO: Polytechnic Education Development Project
Government of Canada US$ 4.95 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Education - Technical and vocational education and training

Gender Equity and Mainstreaming Effective gender mainstreaming

The project will focus on five priority areas: (i) manufacturing; (ii) agro-business (iii) infrastructure and (iv) energy and mining, (v) tourism. The impact of the project is that polytechnic education system contributes to national socio-economic development objectives in these selected industries. The expected outcome is that polytechnic education is more accessible, relevant and responsive to labor market needs, technological and entrepreneurial innovation. The performance targets are (i) the number of polytechnic students enrolled in programs in the 5 priority sectors increases by 25%, with at least 30% of these female; (ii) the number of polytechnic graduates entering the workforce increases by 25% in 5 priority sectors, with at least a 15% increase of these female, and (iii) the percentage of polytechnic graduates finding relevant employment within 6 months of graduation increases 25% by Year 5 at four Centers of Excellences (COEs) and 12 satellite polytechnic institutions. The proposed project has the following outputs:

(a) Output 1: Increased Quality and Relevance of Polytechnic System, Public and Private. The project will: (i) strengthen standards in collaboration with industry and align with the Indonesian Qualification Framework (IQF). Standards will be packaged into professional teaching programs to address skills requirements in 5 industry sectors; (ii) lecturer skills enhancement program to be implemented; (iii) revise accreditation systems, national assessment systems, and quality assurance systems according to IQF and ASEAN policies and guidelines; (iv) Improve facilities and equipment in 4 COEs and 12 satellite polytechnic institutions; (v) facilitate engagement with industry and implement projects funded through a National Skills Fund.

(b) Output 2: Increased and more equitable access to polytechnic education. The project will: (i) increase participation rates in four priority sectors; (ii) revise entry requirements and access policies to increase enrolments; (iii) assess through RPL 20000 students; (iv) link with vocational schools and private providers to establish seamless pathways and provide multiple entry points into the system, (v) fund equity strategies to ensure access by females and disadvantaged groups.

(c) Output 3: Increased private sector involvement in polytechnic sector. The project will: (i) establish an institutional framework for private sector involvement; (ii) implement training programs and methods relevant to industry skills needs; (iii) enable industry to support delivery and assessment of training.

(d) Output 4: Strengthened governance, management and financing of polytechnic institutions. The project will: (i) review and revise the regulatory, employment, management and financing frameworks and systems for polytechnic institutions to be better aligned with government policy objectives.

Project Rationale and Linkage to Country/Regional Strategy

The Government's Economic Development Master Plan 2011 - 2025 seeks to accelerate economic growth to 12% per annum, create jobs and expand development to poorer regions. Six economic corridors are established, eight sectors prioritized to achieve a "self-sufficient, advanced, equitable, and prosperous Indonesia". Component 3 of this plan seeks improvements to human resources to ensure skills are available to realise the policy objectives of the plan. The proposed polytechnic development project supports these plans by increasing access to a quality polytechnic vocational education system. A system that will deliver improved skills that meets the identified needs of employers and the employment objectives and income levels of graduates. Four of the eight sectors identified by the Master Plan are to be targeted through the proposed project, these are: (i) manufacturing; (ii) infrastructure; (iii) mining; and (iv) agro-industry.

Some 75% of employment in Indonesia requires improvement in technical skills to increase enterprise productivity. To remain viable and create additional employment opportunities, enterprises need to improve service standards, produce better quality products, improve work organization, technology usage and build value chains that increase production share or capture value throughout the economy. This is a difficult task given that 90% of workers throughout Indonesia are employed by micro and small enterprises employing fewer than six workers . Over 70% of the employed population works in informal establishments performing low skilled jobs. Vocational schools, supported by the ADB INVEST project , provide quality skills formation for these jobs. To improve the quality and level of skills available to the labour market for higher skilled occupations requires engagement with the polytechnic sector. Currently unemployment amongst polytechnic graduates remains high and participation rates remain low. Graduates often wait for long periods (12 months) to find employment in areas where they have been trained and are often retrained by employers in manufacturing, infrastructure and mining sectors of the economy. Underemployment is close to 40% which further indicates mismatches between skills acquired through current higher education (including polytechnics) with what is required in the labour market . ADB country strategies (including the current Country Operations Business Plan 2011-2013, Education ASR 2010-2015) identify the low competitiveness of firms as a key constraint to growth particularly the low skills and low productivity of the workforce. Middle level skills have been identified by industry associations in each of the four economic sectors critical to growth plans . The government is also acutely aware of the need to substantially up-skill its workforce if the country is going to improve competitiveness measured against its Asian regional neighbors or achieve the objectives of the Master Plan.

Impact The impact will be the polytechnic education to produce graduates responsive to the needs of the labor market and contribute toward increasing productivity in the Priority Sectors

Project Outcome

Description of Outcome Polytechnic education is aligned to the MP3EI in 5 priority sectors.
Progress Toward Outcome Despite the slow start, the work to revise the curriculums, set up LSP, TUK and developing the RPL requirement for program studies supported by the Project had been initiated since the first year. The project work closely with the Ministry to develop the learning outcomes and with the polytechnics in revising the curriculum to be more relevant with industry standards. By early 2017, a consulting firm focusing to support polytechnics to establish the Center of Technology (COT) is expected to be mobilized. The timing is considered aligned with the procured goods and minor civil works undertaken in the polytechnics that will better support the establishment of COT.
Implementation Progress
Description of Project Outputs

Increased quality and relevance of polytechnic system.

Increased and more equitable access to polytechnic institutions

Increased private sector involvement and promotion of an entrepreneurial culture to strengthen polytechnic graduate competitiveness

Strengthened governance and management of polytechnic education

Status of Implementation Progress (Outputs, Activities, and Issues)

Indicator 1 - 13 pre-selected polytechnics and seven institutions under NSF-1 and NSF-2 are planning to establish a center of technology (COT) under the project. The procurement of teaching-learning equipment is ongoing smoothly, after experiencing delay at the initial years due to learning curves.

Indicator 2: Most of project polytechnics have completed their review on the curriculum of priority study programs, which involve industry partners through workshops and study visits. And most polytechnics have conducted training for their teachers/instructors (non-degree training) in relevant fields.

Indicator 3: The polytechnics experience difficulty in identifying relevant resource person to assist them in this area (IQF). It is decided that such assistance will be provided and procured by the Central Project Management Unit and capacity building activities for the Polytechnics to develop this program will be done through a series of workshops and assistanceship.

Indicator 1: The project has delivered training and workshops for PIU staff on project management, including procurement of goods and services, financial management, curriculum review, and strategy in implementing IQF.

Indicator 2: Monitoring and Reporting System has been implemented and constantly undergoing improvement measures. On going developing and upgrading of web based report system on SIMONE (Sistem Monitoring and Evaluasi) by PMU.

Indicator 3: 27 Polytechnics had been selected through the National Skills Funds (NSF)- Competititve Scheme.

Indicator 2: The Recognition Prior Learning (RPL) manual are in the process of development and have been well integrated with the initiative launched by the Ministry.

Indicator 3: the project has provided scholarship to 1,923 students under the BIDIKMISI scheme, BPP Scheme , and PEDP Scheme, of which 1,117 students (58%) are male and 806 (42%) students are female. Total amount of scholarship awarded is IDR19,514,000,000 or equivalent to $1.5 million.

Indicator 2 : all polytechnics have confirmed the establishment of cooperation with partner industries to perform curriculum review, competency testing, internship for students, and short-term training for teachers.

Output 2 - Indicator 1: The project has achieved 16% of its target in establishing Partnership agreements with SMK.

Geographical Location

Safeguard Categories

Environment C
Involuntary Resettlement C
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects Project will not have any adverse environmental impacts.
Involuntary Resettlement No major civil works are expected. Through application to the competitive fund, which will be established by the project, polytechnics will be provided with equipment. Only where the equipment cannot fit into existing workshops, minor civil works will be needed in order to provide for the necessary workshop extension. There will be no temporary or permanent loss of land or other assets in the civil works.
Indigenous Peoples There will be no negative impact on disadvantaged ethnic groups. However, the increased quality of the polytechnic education as well the increased access to the polytechnics, which will be the result of the Project, will also benefit indigenous people.
Stakeholder Communication, Participation, and Consultation
During Project Design

The Executing Agency for the PPTA PDP is the Directorate General of Higher Education (DGHE) of the Ministry of National Education (MoNE). The implementation of the PPTA is supervised by the Director of the Directorate for Learning Programs and Student Affairs (till recently named the Directorate of

Academic Affairs). An advisory counterpart team of DGHE to work with the TA was appointed under the supervision of the Director of Learning Programs and Student Affairs consisting of professional staff of Polytechnic Institutions (7 members) and MoNE (10 members). In the inception phase, the counterpart

team presented its draft Strategic Plan for Polytechnic Development 2010-2014 indicating preferred directions for the intended project, which were taken into account by the PPTA team in the design of the project during the second phase. The draft Plan had been developed in early 2010 in anticipation of the

ADB support to the sector. Also, the planning of the PPTA project was discussed in the inception phase with the objective to align the activities of both teams, to agree on working arrangements and cooperation in preparation for the Polytechnic Development Project. Since the start of the project there has been a series of meetings of the counterpart team with the PPTA experts' team on the planning and activities of the TA and especially on the development of the Problem Tree and the DMF for the project. There have also been joined field visits for the sector assessment, and the PPTA experts were invited to three workshops in which all state Polytechnics participated to present and discuss the initial design of the PDP. The workshops provided an opportunity to inform all state Polytechnics on the intended PDP and to receive their feedback and recommendations on the implementation of the PDP. A major concern of the counterpart team has been the timely production of the final project document for the PDP loan to allow the use of earmarked GoI funds for the PDP in 2011. A large number of polytechnics, other TVET and higher educational institutions, education and training support institutions, industries, industrial associations, ministries and donor agencies were visited for interviews, discussions, meetings, collecting information and informing them on the intended PDP. Some 32 visits were made to different public and private polytechnics, some 16 visits to different industries, 8 visits to supporting agencies (BNSP, LSP, Kopertis, BAN-PT, ASPI, SEAMOLEC), and 7 visits to Ministries other than MONE. Around 95 interviews were conducted with one or more resource persons. A workshop with the donor community and stakeholders from the polytechnic education sector was held in the Ministry of Education on 29th July 2010, in which the PPTA was presented and discussed to inform the international donor community and stakeholders on the intended PDP. Several donors, including ADB, presented their visions and plans in the context of overall skills development policies and requirements in Indonesia, and options for donor coordination and alignment were discussed. The series of meetings and workshops with the MoNE counterpart group and involving representatives of the Polytechnics were an important venue to socialize the project objectives and approach and to get feedback in the process of defining the project design and the technical approaches for its implementation. Some 16 meetings were held with the counterpart group till May 2011. Of special importance were the meetings with all polytechnic directors and management staff arranged by the counterpart group, respectively in Manado, Surabaya, Batam and Jakarta. The objectives of the PDP were socialized and intensively discussed with the polytechnic directors and managing staff, including implementation strategies. For the definition of the Problem Tree based upon the findings of the assessment phase, and for the initial design of the DMF, the project team had a series of intensive focus group discussions by which both documents gradually took shape and were prepared for further consultation with the ADB and stakeholders at the central and institutional levels.

During Project Implementation The Directorate General of Higher Education (DGHE) of the Ministry of National Education (MONE) is the Executing Agency (EA) for the project. The EA is responsible for the overall management and implementation of the project. A project steering committee is established, chaired by the Deputy Minister of BAPPENAS, to provide strategic guidance for the project. This committee comprises persons from key sector stakeholders including BAPPENAS, relevant employer associations and the Ministry of Manpower and Trans Migration (MOMT). The MOF is responsible for disbursement of the Project funds. The project management unit (PMU) is established by DGHE, under the guidance of the project director who is the Director of Learning and Student Affairs in DGHE. The PMU is headed by a project manager and is responsible for day-to-day project implementation, planning and budgeting, procurement, disbursement, monitoring, supervising, overseeing of implementation in project institutions, and submitting the required reports to the Government and ADB. The project also establishes a web based resource to allow interested organisations/individuals to track project activities and progress in meeting project outputs.

Responsible Staff

Responsible ADB Officer Wiryono, Sutarum
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
Directorate General of Higher Education
Ministry of Education & Culture, Bldg. E
17th Flr, Jl Jenderal, Sudirman, Pintu 1
Senayan Jakarta 10002, Indonesia


Concept Clearance -
Fact Finding 01 Dec 2011 to 23 Dec 2011
MRM 16 Mar 2012
Approval 31 Oct 2012
Last Review Mission -
Last PDS Update 17 Oct 2016

GrantĀ 0343-INO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Apr 2013 09 Dec 2013 27 Feb 2014 30 Jun 2018 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 4.95 Cumulative Contract Awards
ADB 0.00 12 Apr 2013 0.00 2.44 49%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 4.95 12 Apr 2013 0.00 1.88 38%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

LoanĀ 2928-INO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Oct 2012 21 Nov 2012 07 Jan 2013 30 Jun 2018 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 91.70 Cumulative Contract Awards
ADB 75.00 31 Oct 2012 43.37 0.00 58%
Counterpart 16.70 Cumulative Disbursements
Cofinancing 0.00 31 Oct 2012 37.09 0.00 49%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

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