Infrastructure development: Promising opportunities for PPP projects
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Pembangunan Infrastruktur: Peluang Menjanjikan Proyek KPBU
22 April 2025
By Alifian Asmaaysi & Yanita Petriella
Bisnis, JAKARTA — The Public Works (PU) Ministry has prepared a number of national infrastructure projects worth Rp160 trillion as promising investment opportunities through the Public-Private Partnership (PPP) scheme.
Deputy Minister of Public Works, Diana Kusumastuti, explained that the infrastructure projects, totalling Rp160 trillion, will support the construction of toll roads and water resources (SDA) projects.
The implementation of the PPP scheme is carried out in accordance with Regulation of the Minister of Public Works and Public Housing No. 2 of 2021 as a means to accelerate infrastructure development through private sector participation.
PPP is a cooperation scheme between the government and private entities to provide infrastructure, aside from being funded by the state budget (APBN).
"There are 10 PPP projects worth Rp42.57 trillion in the water resources and energy sectors, and 5 other projects worth Rp31.97 trillion covering drinking water supply systems and irrigation modernisation. Additionally, there are 8 large-scale projects worth Rp87.92 trillion ready to be offered, including toll road construction, renewable energy, and water and irrigation systems,” Diana explained in an official statement on Sunday (20/4).
Diana ensured that all these projects are designed as promising investment opportunities with transparent, risk-sharing, and sustainable schemes for public and private partners.
Furthermore, to support the investment climate, the Indonesian government has also simplified business licensing through the Online Single Submission (OSS) system and regional-based tax policies.
Diana also emphasised that foreign investor involvement is clearly regulated through the Construction Services Law and the Job Creation Law, including through the mechanism of international competitive bidding.
Meanwhile, the national infrastructure development priorities in 2025 are focused on four main sectors: water resources including irrigation strengthening and coastal protection; roads and bridges including strategic toll roads and flyovers; basic infrastructure such as access to clean water, sanitation, and residential environments; and strategic infrastructure like educational facilities and public markets.
“The development targets will continue to be increased in 2026 with a broader scale and scope,” said Diana.
Diana previously ensured that the government is committed to developing hydroelectric power plants (PLTA) at existing dams.
According to her, dam construction must be optimally utilised, including as a source of electrical energy.
“We want dams to play a role in achieving energy self-sufficiency in line with Asta Cita. Therefore, various steps need to be taken to maximise the utilisation of dams,” she said.
Director General of Infrastructure Financing for Public Works, Rachman Arief Dienaputra, added that currently, there are three dams in process to be included in the PPP scheme, namely Tiga Dihaji Dam in South Sumatra, Bintang Bano Dam in West Nusa Tenggara, and Leuwikeris Dam in West Java.
“These three dams have the potential to support energy security. Tiga Dihaji Dam has the potential to generate 40 megawatts (MW) of electricity, Bintang Bano Dam 6.3 MW, and Leuwikeris Dam 7.4 MW,” he said.
Out of the 61 dams built from 2015-2024, 43 dams have hydroelectric power potential. As many as 35 of these 43 dams have been included in the Electricity Supply Business Plan (RUPTL) with a potential power of 250.51 MW, while the other eight are still under study with a potential power of 7.65 MW.
Further, as many as ten of the 35 dams are priority PPP hydroelectric power dams, namely Bulango Ulu Dam in Gorontalo, Way Apu Dam in Maluku, Lau Simeme Dam in North Sumatra, Feureuto Dam in Aceh, Cipanas Dam in West Java, Pamukkulu Dam in South Sulawesi, Batang Tongar Dam in West Sumatra, Batang Batahan Dam in North Sumatra, Leuwikeris Dam in West Java, and Bener Dam in Central Java.
Deputy Minister of Energy and Mineral Resources, Yuliot Tanjung, emphasised the importance of integrating dam and hydroelectric power plant development into one PPP scheme.
He argues that it is because the PPP hydroelectric power scheme is expected to contribute to energy self-sufficiency by utilising existing resources. This scheme also allows for the efficient acceleration of electricity infrastructure development through private sector involvement.
“If the PPP scheme can combine dam and hydroelectric power plant development into one package, the process will be more efficient. With a single package scheme for irrigation, raw water, and hydroelectric power plants, economic planning can be made more thorough from the start. When offered in the PPP scheme, the economic value for business actors also becomes more attractive,” he said.
PT Hutama Karya (Persero) along with its subsidiary PT Hutama Karya Infrastruktur (HKI) confirms its readiness to undertake the development of the PPP Flyover Sitinjau Lauik project in West Sumatra, which is part of the national road and Trans-Sumatra expressway.
“With this project, HK continues to strengthen its position as a major player in infrastructure development in Indonesia,” said EVP Corporate Secretary of Hutama Karya, Adjib Al Hakim, on Monday (24/3).
The PPP Flyover Panorama I (Sitinjau Lauik I) project will connect Padang City and Solok City, which is part of the national road and Trans-Sumatra toll way.
“With the PPP scheme, we can ensure that this project is not only responsive in meeting infrastructure needs but also sustainable and provides significant economic benefits to the local community,” he said.
FIVE-YEAR PERIOD
The Public Works (PU) Ministry targets infrastructure development through the PPP scheme to reach Rp544.48 trillion during President Prabowo Subianto’s administration or precisely in 2025-2029.
The Public Works Minister, Dody Hanggodo, stated that infrastructure development should not stop just because of budget constraints after the PU Ministry’s 2025 budget ceiling was cut by Rp81.38 trillion, leaving only Rp29.57 trillion.
“As instructed by the President, we continue to encourage investment through the PPP scheme so that development can continue optimally. Collaboration with the private sector allows strategic infrastructure projects to be realised more quickly and efficiently,” he said in an official statement on Monday (10/2).
The large room for investment of up to Rp544.48 trillion is needed to support the development of 11 water resources (SDA) projects, 23 toll road and bridge projects, and 11 residential projects.
With private sector involvement, the government hopes these projects can be realised optimally, both in terms of funding and implementation efficiency.
Through the PPP scheme, the government opens up opportunities for private investors to support national infrastructure development.
With a more flexible financing model, the government remains a regulator and supervisor to ensure the quality and sustainability of the projects being carried out.
Dody mentioned that among the priority infrastructure investment sectors is the construction of dams, reservoirs, toll roads, and bridges. This infrastructure not only supports water and national connectivity but also has a significant economic impact.
“Dams and reservoirs contribute to food and energy security, while toll roads accelerate logistics distribution and enhance economic competitiveness,” added the Public Works Minister.
He added that with the opening of investment opportunities and efforts to increase funding, it is hoped that the infrastructure sector in Indonesia will continue to develop in supporting national economic growth and community welfare.
