Promoting Public-Private Partnerships: A Review of The Indonesian Infrastructure Guarantee Fund

Following the Asian Crisis in 1997-1998, the quantity and quality of infrastructures in Indonesia is deteriorating. Furthermore, there is a relatively big gap in the budget allocated and budget needed in the infrastructure development. Therefore, the government decided to use the Public Private Partnership (PPP) as an alternative for infrastructure financing. However, there are challenges in the implementation of PPP. It needs certain requirements to ensure that there is a strong foundation on the ground for PPP to grow. This becomes the basic reason for the government to initiate the reform strategies, including regulatory and institutional reform. Moreover, as part of the reform, the government also established the Indonesian Infrastructure Guarantee Fund (IIGF) in order to make the infrastructure project more attractive to the investor. The research paper examines the impact of the reform strategies taken by the government by looking at the performance of IIGF, whether it can fulfill its mandate to attract private sector be involved in the infrastructure development.