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IIGF Provides Guarantee for the Gedebage – Tasikmalaya – Cilacap Toll Road Project with the PPP Scheme

31 JANUARY 2022

Jakarta, 31 January 2022 – Indonesia Infrastructure Guarantee Fund/IIGF today (31/01) signed the Guarantee and Regress Agreement for the Government Cooperation with Business Entity (PPP) project for the Gedebage – Tasikmalaya – Cilacap Toll Road in Auditorium of the Ministry of Public Works and Public Housing (PUPR), Jakarta, together with the Minister of PUPR RI Basuki Hadimuljono, witnessed by the Director General of State Assets of the Ministry of Finance representing the Minister of Finance of the Republic of Indonesia.

As one of the Special Mission Vehicles (SMV) of the Ministry of Finance of the Republic of Indonesia, IIGF is always committed to supporting the Government's efforts in accelerating the development of infrastructure projects with alternative financing schemes, including the PPP scheme. The acceleration of infrastructure development is also an important step for the Government in order to overcome the impact of the COVID-19 pandemic for the recovery of the national economy.

The 206.65 km toll road project that crosses Bandung Regency, Garut Regency, Tasikmalaya Regency, Tasikmalaya City, Ciamis Regency, Pangandaran Regency, Cilacap Regency (West Java - Central Java) is expected to encourage increased economic growth through increased connectivity between regions, especially those used as logistics routes, tourism, access roads to ports and airports as well as savings in Vehicle Operational Costs (BOK) and travel time values, including indirect benefits in the form of increasing employment opportunities with project development. This project has a concession period of 40 years since the Work Start Order (SPMK).

The Minister of PUPR RI Basuki Hadimuljono expressed his gratitude to all the Ministry of Finance who have provided alternatives in encouraging the acceleration of infrastructure development through the PPP scheme and also fiscal tools, one of which is guaranteeing this project through IIGF and PT Jasa Marga Gedebage Cilacap and the consortium involved so that this project can be successfully signed which will benefit the community and also have an impact on the availability of jobs and increasing the national economic recovery.

In his remarks delivered by the Director General of State Assets, the Minister of Finance said that with the signing of the guarantee agreement and the regress agreement on the project, the Ministry of Finance through our fiscal tools, namely IIGF, will provide guarantees that include the risk of delays in land acquisition, the risk of delays in returning the bailout funds. Land (DTT), risk of delay in tariff adjustment, political risk - permanent. The guarantee provided by IIGF is intended to provide certainty and comfort for investors in investing in the toll road project. The alternative financing that we provide is expected to assist in accelerating infrastructure development so that it will increase economic growth whose benefits can be directly felt by the community.

Meanwhile, IIGF President Director M. Wahid Sutopo said that the guarantee provided by IIGF for this project was one of the facilities from the Ministry of Finance to increase the feasibility and convenience of investment. With the PPP scheme and guarantee by IIGF, it is hoped that this project can be developed and maintained properly so that it can provide the widest possible benefits to the community.

"Today's signing is the signing of IIGF's first project in 2022. IIGF's commitment to continue to encourage alternative financing schemes will continue to be carried out, mainly to help the burden of the State Budget which until now is still focused on National Economic Recovery. IIGF also openly supports the Ministry of PUPR, other ministries and local governments that will develop PPP scheme projects," concluded Sutopo.

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