Indonesia: Advanced Knowledge and Skills for Sustainable Growth Project
The proposed project will support advanced skills and knowledge for sustainable economic growth in Indonesia by upgrading three public universities in Sumatra and one public university in Bandung, West Java, as the first phase of higher-education reform. The project will support the construction and/or upgrading of new facilities that incorporate green-building and climate-proofing design features. The project will strengthen staff capacity at the universities and support demand-driven quality education and research aligned with local economic priorities. It will integrate new technologies in teaching programs, strengthen technical and vocational teacher education, and help the government develop a medium-term higher-education investment plan.
Southeast Asia Department
Request for information
|Project Name||Advanced Knowledge and Skills for Sustainable Growth Project|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
|Sector / Subsector||
Education / Tertiary
|Gender Equity and Mainstreaming||Gender equity|
|Description||The proposed project will support advanced skills and knowledge for sustainable economic growth in Indonesia by upgrading three public universities in Sumatra and one public university in Bandung, West Java, as the first phase of higher-education reform. The project will support the construction and/or upgrading of new facilities that incorporate green-building and climate-proofing design features. The project will strengthen staff capacity at the universities and support demand-driven quality education and research aligned with local economic priorities. It will integrate new technologies in teaching programs, strengthen technical and vocational teacher education, and help the government develop a medium-term higher-education investment plan.|
|Project Rationale and Linkage to Country/Regional Strategy||
Strategic context. The government seeks to accelerate economic growth by promoting technology-intensive industries, infrastructure development, and high-end services, while transforming agriculture and fisheries. Indonesia's manufacturing industry aims to grow and integrate new technologies to increase productivity. New technologies such as big data, robotics, and the internet of things will transform the economy, and can create new industries and better-quality jobs, and thus increase labor productivity. However, these new technologies will alter the skills required of the workforce, leading to lower wage growth for less-skilled laborers, or even loss of employment to automation, thereby exacerbating income inequality. Already, demand for jobs that require non-routine cognitive tasks have grown faster than jobs requiring routine and manual tasks. Without adequate skills development or retraining, workers with weaker skills face hurdles in seizing the opportunities that new technologies provide. As of end-2017, only 11% of the labor force had completed higher education, and in 2017 fewer than 20% of graduates held degrees in technology-relevant fields like engineering with few women among them. Half of the labor force is underqualified for the jobs they are performing. About 10% of the labor force is overqualified, most of whom hold degrees, indicating an increasing risk of mismatch between demand and supply. Indonesia needs more higher-education graduates both men and women with degrees that better match emerging opportunities in the labor market.
Higher education needs to accommodate an increasing volume of students. The gross rate of enrollment in higher education increased from 17% in 2004 to 31% in 2018, with student numbers increasing from 4.0 million to 7.5 million. Advanced skills education is provided by higher-education institutions (HEIs) such as universities and polytechnics. The Ministry of Research, Technology and Higher Education (MORTHE) administers public HEIs and licenses private HEIs.F From 2004 to 2018, the number of students per public HEI grew significantly, resulting in very crowded institutions. During the same period the number of private HEIs grew significantly to accommodate more students. While Indonesia has made significant progress in providing access to higher education, additional effort is needed to meet growing public demand.
Education and research in higher-education institutions do not meet current and future industry needs. Indonesia's labor force is underqualified. Employers indicate that higher- education graduates lack reasoning, problem solving, and teamwork skills. Curricula need to focus more on practical and soft skills like communication, teamwork, and work ethic, and should be updated more regularly. With a few notable exceptions, HEIs do not benefit from links to industry and rely for the most part on traditional lectures. Teachers lack the skills to adopt modern teaching techniques that integrate practical skills training with theoretical content. Few HEI staff have doctoral degrees. Moreover, the sharp increase in enrollment has led public HEIs to recruit more temporary, less-qualified staff and to focus mainly on education and neglecting research. Public HEIs are often overcrowded and have outdated and/or inadequate equipment, lecture halls, and laboratories.
Higher-education institutions outside Java need to improve to support local society and the economy. Of Indonesia's 122 public HEIs, 40% are in Java, and so are nine of Indonesia's top-10 public universities. HEIs outside Java cater to poorer parts of the country. They are rated lower in quality, have limited financial resources, fewer qualified staff, and hardly conduct any research. With adequate investment in facilities and human resources, the HEIs outside Java can play an important role in the local economy. They can provide the advanced skills needed for inclusive economic growth, collaborate with local industry to introduce new technologies, and enable a more diverse array of students to attend high-quality universities.
Higher education needs to provide better teachers to meet growing demand for technical education. Senior secondary vocational education (SMK) students are not as employable as they should be, and thus the quality and relevance of SMK education needs to improve. Teachers at SMK schools and HEIs lack the practical skills and industry experience needed for the technical subjects they teach. They rely mainly on traditional lectures, instead of using more interactive, inquiry-based teaching methods. Employment rules for teachers focus on academic qualifications, which hampers recruitment of teachers with practical experience. Only 20% of SMK vocational subject teachers have the required qualifications, implying that 90,000 of such teachers require skills improvement. Teaching universities and institutions lack adequate programs, facilities, and industry linkages, and are ill-prepared to integrate new technologies to prepare teachers for the changing needs of technical education. Indonesia urgently requires better SMK teachers, as the number of SMKs and students has increased significantly since 2012. In response, the MORTHE and the Ministry of Education and Culture (MOEC) have introduced programs to strengthen teacher education. This includes changing employment rules to allow people with industry backgrounds to become teachers. Given the urgent need for more and better technical-and-vocational-education-and-training (TVET) teachers, the MORTHE and MOEC are preparing a strategy to educate TVET teachers, which includes integrating pre- and in-service training and increasing industry involvement.
Efforts to improve quality and relevance need to become more effective. The higher education quality assurance mechanism and the Indonesian qualification framework (IQF) are the two main instruments to improve the quality and relevance of higher education. HEIs also operate their own internal quality assurance systems. An independent panel is in charge of assessing and accrediting HEIs at the program level and at the institution level. From 2019, the national accreditation body for higher education will introduce an improved instrument to assess HEIs at the institution level. The new instrument will focus on performance and processes. Under the IQF, which came into effect in 2012, national qualification standards for occupations are developed with inputs from industry to ensure that the education and training institutions provide skills development which meets industry needs. The IQF is meant to be the unifying framework for skills development. While progress has been made, the system needs to be strengthened so that IQF certificates issued under the national assessment and accreditation system become nationally and possibly internationally accepted.
The government's strategy. Higher education is a priority for the government. The National Medium-Term Development Plan, 2015 2019, the MORTHE's strategy for 2015 2019, and the presidential decree on strengthening vocational education set out the directions to improve the quality and relevance of higher education. The government will focus on improving access to and the quality of science, engineering, agriculture, and health education and research; establishing stronger collaboration with industry; and strengthening teacher quality. The MORTHE's investment program aims to strengthen the capacity of HEIs to meet increased demand for higher education. HEIs outside Java are included in the investment to ensure equitable growth. The MORTHE expects each university to become a center of excellence in a specific academic discipline to meet current and future (local) economic needs. The government is preparing its National Medium-Term Development Plan, 2020 2024, with a strong focus on the role of higher education to support technological change, innovation, and entrepreneurship. As part of the 2020 2024 plan, the MORTHE will prepare a medium-term investment plan for higher education. This investment plan will aim to accelerate innovation in new technology and stimulate entrepreneurship at top universities, and will also target the development of advanced skills at regional universities so local economies can also benefit from the technological transformation.
Financing requirements for upgrading higher-education institutions. Since 2010, the government has allocated 20% of the national budget to education, with the MORTHE receiving about 10% of the education budget. This includes revenue that public universities gain from tuition and other resources. However, this budget is insufficient to upgrade facilities to offer quality education to an increased number of students, especially for public HEIs outside Java, which have fewer revenue-generating options. Hence, development partners are financing the HEI upgrades. As part of the initiative, the MORTHE has requested support from the Asian Development Bank (ADB) to upgrade four public universities: the University of Malikussaleh (UNIMAL), the University of Jambi (UNJA), and the University of Riau (UNRI) all in Sumatra; and the Indonesia University of Education (UPI) in Bandung, West Java.
The Sumatran universities are mid-tier universities providing higher education to support economic development in their regions. Financing is needed to provide lecture halls, laboratories, and other facilities to meet increased demand for higher education, improve quality and relevance of education and research, and ensure an inclusive, conducive, and gender-friendly teaching and learning environment. UNIMAL caters mainly to students from East Aceh, a post-conflict and post-tsunami area in which agriculture is the main economic activity. It will focus on sustainable agriculture to support local farmers and small agribusiness. UNJA, the only public university in poor but natural-resources-rich Jambi Province, will focus on sustainable management of natural resources to support the province's transformation from an extractive to a sustainable economy. UNRI, located in Riau Province, which has seen strong economic growth, aims to strengthen its capacity in aquatic and marine science to accommodate agribusiness companies, related service industries, and farmers.
UPI, a teaching university, will become a center of excellence for educating TVET teachers. The center will prepare TVET teachers to teach emerging technologies to meet current and future industry needs. The center will collaborate with other universities that specialize in TVET-teacher education; with other HEIs in Bandung; and with SMKs, the MORTHE, and the MOEC. UPI will establish a special unit to strengthen industry relationships within the center of excellence.
Lessons learned. The project design incorporated lessons learned from the ADB-supported Polytechnic Education Development Project and the Education Sector Analytical and Capacity Development Partnership. First, programs designed by industry and individual HEIs generally produce better results. Second, to reform an institution, a piece meal approach focusing at a few programs does not sustain. The design should address all stakeholders and units within an organization, and ensure interconnectivity between these units so reforms reinforce each other and sustain. Third, education institutions should design their skills development programs based on the skills needs of the local industry, as each location and each industry is unique.
|Impact||Income and productivity of the working age population increased|
|Description of Outcome||Access, relevance, and quality of targeted universities strengthened.|
|Progress Toward Outcome|
|Description of Project Outputs||
Market-responsive programs delivered
Training of TVET teachers improved
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Output 1: Market-responsive programs delivered.
Output 1 covers civil works construction, provision of equipment and consulting services, capacity development of staff, and program development in support of UNIMAL, UNJA, and UNRI.
Recruitment of consulting services (project management and supervision consultant) to support the three universities is still ongoing, with expected mobilization by Q2-2020 for UNJA and by Q4-2020 for UNIMAL and UNRI. Preparation of civil work is still at initial stage, where DEDs for construction works of UNIMAL, UNJA, and UNRI are expected to be completed within 2020. UNIMAL and UNJA have started implementing capacity development programs for staff consisting of overseas degree and non-degree training programs, domestic internships and short-courses, and in-house training programs.
Output 2: Training of TVET teachers improved.
Output 2 covers civil works construction, provision of equipment and consulting services, capacity development of staff, and TVET program development in support of UPI.
Selection of project management and supervision consultant (firm) is ongoing with expected mobilization by Q2-2020. Procurement of civil works is also ongoing though there were delays due to due diligence process from the government authority and quality control process, including ADB procurement clinics with PIU, Procurement Committee and PMU (since this is the first bidding document of the project). Expected contract award and implementation of civil works construction is by Q3-Q4 2020. UPI has also started implementing development programs consisting of workshops and studies (i.e., documents for establishment of 5 new study programs, establishment of a new study program (automotive study program), and document of CoE development roadmap) and research work (i.e., documents of 7 applied research related to CoE development).
|Geographical Location||Aceh, Jambi, Riau, West Java|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The project is classified as Category B for environment given that the environmental impacts associated to the development of lecture rooms, teaching laboratories, and other academic facilities in the four universities are assessed to be location-specific, can be readily mitigated, and the locations are not ecologically sensitive or high risk with respect to community health and safety. The project prepared an Initial Environmental Examinations (IEE) report which includes an Environmental Management Plan (EMP) which list measures to mitigate the identified environmental impacts. Each university is also preparing its own IEE and EMP.|
|Involuntary Resettlement||The project is classified as category C for Involuntary Resettlement impact as all universities will use land within their campuses.|
|Indigenous Peoples||The project is classified category C for Indigenous Peoples as no indigenous people live within the project area.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
All recruitment of consulting services will be undertaken in accordance with ADB''s Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017), as amended from time to time.
There are a total of 13 consultancy packages to be financed by ADB loan and by the government of Indonesia. The procurement plan of the project showing all procurement packages is published.
All procurement of goods and works will be undertaken in accordance with ADB''s Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017), as amended from time to time.
There are a total of 37 packages of civil works and good/equipment/furniture, to be financed by ADB loan and by the government of Indonesia. The procurement plan of the project showing all procurement packages is published.
|Responsible ADB Officer||Wiryono, Sutarum|
|Responsible ADB Department||Southeast Asia Department|
|Responsible ADB Division||Human and Social Development Division, SERD|
Ministry of Education, Culture, Research and Technology
Jl. Jend Sudirman, Pintu I
Indonesia Ministry of Finance Directorate General of Budget Financing and Risk Management
Frans Seda Building
Jln. Dr. Wahidin Raya No. 1
Jakarta 10710, Indonesia Ministry of Research, Technology and Higher Education
Building D, Jalan Jenderal Sudirman,
Pintu Satu, Senayan Jakarta 10270
|Concept Clearance||23 Oct 2017|
|Fact Finding||14 May 2018 to 25 May 2018|
|MRM||06 Aug 2018|
|Approval||29 Nov 2018|
|Last Review Mission||-|
|Last PDS Update||27 Mar 2020|
|Approval||Signing Date||Effectivity Date||Closing|
|29 Nov 2018||17 Dec 2018||08 Apr 2019||30 Jun 2024||-||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||266.52||Cumulative Contract Awards|
|ADB||200.00||07 Sep 2021||48.85||0.00||24%|
|Cofinancing||0.00||07 Sep 2021||11.39||0.00||6%|
|Status of Covenants|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Advanced Knowledge and Skills for Sustainable Growth Project: Procurement Plan||Procurement Plans||Jul 2021|
|Advanced Knowledge and Skills for Sustainable Growth Project: Updated Project Administration Manual||Project/Program Administration Manual||Jun 2020|
|Loan Agreement (Ordinary Operations) for Loan 3749-INO: Advanced Knowledge and Skills for Sustainable Growth Project||Loan Agreement (Ordinary Resources)||Dec 2018|
|Advanced Knowledge and Skills for Sustainable Growth Project: Report and Recommendation of the President||Reports and Recommendations of the President||Nov 2018|
|Advanced Knowledge and Skills for Sustainable Growth Project: Gender Action Plan||Gender Action Plans||Nov 2018|
|Advanced Knowledge and Skills for Sustainable Growth Project: Project Administration Manual||Project/Program Administration Manual||Nov 2018|
|Proyek Pengetahuan dan Keterampilan Canggih untuk Pertumbuhan Berkelanjutan: Lembar Data Proyek||Translated PDS||Oct 2017|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
|Title||Document Type||Document Date|
|Advanced Knowledge and Skills for Sustainable Growth Project: University of Malikussaleh Initial Environmental Examination||Initial Environmental Examination||Oct 2020|
|Advanced Knowledge and Skills for Sustainable Growth Project: University of Riau Initial Environmental Examination||Initial Environmental Examination||Oct 2019|
|Advanced Knowledge and Skills for Sustainable Growth Project: Indonesia University of Education Initial Environmental Examination||Initial Environmental Examination||Oct 2019|
|Advanced Knowledge and Skills for Sustainable Growth Project: University of Jambi Initial Environmental Examination||Initial Environmental Examination||May 2019|
|Advanced Knowledge and Skills for Sustainable Growth Project: Initial Environmental Examination||Initial Environmental Examination||Jul 2018|
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
ADB to Enhance Advanced Skills Development and Upgrade Higher Education Quality in IndonesiaADB has approved a $200 million loan to upgrade four higher education institutions in Indonesia and improve the technical and vocational training programs that will help youth obtain the job skills needed in the evolving global economy.
|Contract Title||Approval Number||Contract Date||Contractor||Contractor Address||Executing Agency||Contract Description||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|CSR-01: PROJECT MANAGEMENT AND SUPERVISION CONSULTANT TO SUPPORT UNRI||Loan 3749||05 May 2021||PT CIRIAJASA ENGINEERING CONSULTANS||JALAN RAYA PASAR MINGGU NO. 36D KELURAHA DUREN TIGA, KECAMATAN PANCORAN JAKARTA SE INDONESIA||Ministry of Research, Technology & Higher Educ||CONSULTANCY||1401463.181||1401463.181|
|CSJ-02: DETAILED ENGINEERING DESIGN CONSULTANT TO SUPPORT UNJA||Loan 3749||05 Jan 2021||PT GRIKSA CIPTA||JL AMPERA III NO. 23 PASAR MINGGU SOUTH JAKARTA 12550 INDONESIA INDONESIA||Ministry of Research, Technology & Higher Educ||CONSULTANCY||913952.598||913952.598|
|CSM-01: PROJECT MANAGEMENT AND SUPERVISION CONSULT ANT TO SUPPORT UNIMAL||Loan 3749||23 Dec 2020||PT WIDHA JV WITH PT CIRIAJASA ENGINEERING||GRAHA WIDYA DHARMA BUILDING 1ST FLR JL. PROF. H SOEDARTO SH 58 SEMARANG JAVA INDONESIA||Ministry of Research, Technology & Higher Educ||CONSULTANCY||1776835.992||1776835.992|
|CWP-01 CONSTRUCTION OF BUILDINGS FOR PPG, FPTK, AND COE VOCATIONAL FOR UPI||Loan 3749||21 Oct 2020||PT ADHI KARYA PERSERO||18 OFFICE PARK LANTAI 11 JL TB SIMATUPAN G KAV.18 RT RW 002/01 KEL KEBAGUSAN KEC. INDONESIA||Ministry of Research, Technology & Higher Educ||CONSTRUCTION||13956530.68||13956530.68|
|CSP-01 PROJECT MANAGEMENT AND SUPERVISION CONSULTANT TO SUPPORT UPI||Loan 3749||24 Sep 2020||PT CIRIAJASA CIPTA MANDIRI||JL CIPUTAT RAYA NO. 7 KEBOYARAN LAMA UTARA JAKARA SELATAN JL KERINCI IX NO.14 INDONESIA||Ministry of Research, Technology & Higher Educ||CONSULTANCY||1147640.805||1147640.805|
|CS PMU-01: PROJECT MANAGEMENT COSULTANT TO SUPPORT THE PROJECT MANAGEMENT UNIT||Loan 3749||15 Sep 2020||PT TESAPUTRA ADIGUNA JV WITH PT MULTIDECON||JL CITAMIAN NO. 61 SUKAMAJU CIBEUNYING KIDUL KOTA BANDUNG JAWA BARAT INDONESIA||Ministry of Research, Technology & Higher Educ||CONSULTANCY||1042070.19||1038543.484|
|CSJ-01 PROJECT MANAGEMENT AND SUPERVISION CONSULTA NT (PMSC) TO SUPPORT UNJA||Loan 3749||02 Jul 2020||PT CIRIAJASA ENGINEERING CONSULTANS||JL RAYA PASAR MINGGU NO.36D PANCORAN JAKARTA SELATAN INDONESIA||Ministry of Research, Technology & Higher Educ||CONSULTANCY||1736208.17||1696810.734|
|OVERSEAS DOCTORAL PROGRAM FOR UNIMAL||Loan 3749||28 Nov 2019||VARIOUS||VARIOUS INDONESIA||Ministry of Research, Technology & Higher Educ||OTHERS||1554237.02||1551924.33|
|Title||Document Type||Document Date|
|Advanced Knowledge and Skills for Sustainable Growth Project: Procurement Plan||Procurement Plans||Jul 2021|