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 - Pembiayaan infrastruktur: Pemerintah siapkan pemanis baru bagi swasta
4 June 2025
By Alifian Asmaaysi
The Ministry of Public Works is drafting new regulations to attract private investors to participate directly in financing large-scale infrastructure projects. Minister of Public Works Dody Hanggodo stated that Indonesia’s total infrastructure development funding requirement is estimated at Rp1,905.3 trillion.
He acknowledged that securing investment under the Public-Private Partnership (PPP) scheme has been challenging, citing reports that many investors have become discouraged from participating in government-led projects. Dody remarked that the private sector is hesitant to engage in PPPs, and that this issue must be discussed to identify the reasons for their reluctance and determine the necessary support.
Despite the difficulties, he emphasised that Indonesia’s infrastructure development needs remain substantial. As a solution, the government will work hard to address the financing shortfall by enhancing investment opportunities through the PPP scheme. The estimated funding gap currently stands at Rp753 trillion, and beyond PPPs, the government is committed to developing innovative financing mechanisms to close this gap.
According to current projections, Indonesia’s infrastructure funding requirement for the RPJMN 2025–2029 is Rp 1,905.3 trillion. Of this amount, 35.63 percent will be covered by the State Budget (APBN), equating to Rp 678.9 trillion, while 24.87 percent, or approximately Rp 473.28 trillion, will be financed via Regional Budgets (APBD).
Director General of Infrastructure Financing at the Ministry of Public Works, Rachman Arief Dienaputra, noted that the government is preparing five infrastructure projects that will be auctioned soon under the PPP scheme. These projects consist of three toll road developments and two dam projects. The toll road projects include Pejagan–Cilacap, Gilimanuk–Mengwi, and Cileunyi–Garut–Tasik, all of which form part of the Trans-Java Toll Road network. The two dam projects include Tiga Dihaji Dam, intended for hydropower generation (PLTA), and Bintang Banu Dam, which will be auctioned under the PPP scheme for floating solar power plant (PLTS) development.
Regarding the Yogyakarta–Bawen Toll Road, which is part of the Trans-Java Toll Road network, Dody revealed that its construction budget has reached Rp10.65 trillion. He highlighted that this toll road will play a key role in boosting economic growth and connectivity in Joglosemar, the Golden Triangle of Yogyakarta, Solo, and Semarang. He further explained that the toll road would accelerate mobility, create new economic opportunities for local communities, and improve access to Borobudur and other tourist destinations, enhancing tourism and driving local economic development.
Director General of Highways at the Ministry of Public Works, Roy Rizali Anwar, clarified that PT Jasamarga Jogja Bawen is responsible for developing the Yogyakarta–Bawen Toll Road under its role as a toll road business entity (BUJT). The total project investment stands at Rp14.26 trillion, with construction costs reaching Rp10.65 trillion.
Roy elaborated that the toll road spans two provinces, Central Java and the Special Region of Yogyakarta, and will link the Semarang–Solo Toll Road with the Solo–Yogyakarta Toll Road and Yogyakarta International Airport (YIA) in Kulon Progo. The Yogyakarta–Bawen Toll Road covers a total distance of 75.12 kilometres and is divided into six sections. Section 1, JC Sleman–SS Banyurejo, is 8.80 kilometres long, with 96.73 percent of land acquisition completed and construction progress at 77.32 percent. Section 2, SS Banyurejo–SS Borobudur, spans 15.20 kilometres and has completed 191.60 percent of land acquisition. Section 3, SS Borobudur–SS Magelang, is 8.10 kilometres long, with 73.20 percent of land acquisition completed. Section 4, SS Magelang–SS Temanggung, covers 16.65 kilometres, with 36.54 percent of land acquisition completed. Section 5, SS Temanggung–SS Ambarawa, spans 21.39 kilometres, with 11.25 percent of land acquisition completed. Section 6, SS Ambarawa–JC Bawen, is 4.98 kilometres long, connecting to the Semarang–Solo Toll Road, with 95.8 percent of land acquisition completed and construction progress at 61.40 percent.
Sections 1 and 6 are targeted for completion this year. Roy stated that Section 1 is expected to be finished by the second quarter of 2026, while Section 6 is set to be completed by the fourth quarter of 2025. Efforts will be made to accelerate land acquisition for the remaining sections so construction can begin as soon as possible, with the expectation that the full toll road will be completed between 2027 and 2028.
Jumbo projects
The Coordinating Minister for Infrastructure and Regional Development, Agus Harimurti Yudhoyono, has announced plans to leverage the International Conference on Infrastructure (ICI) in Jakarta on 11–12 June 2025 to showcase strategic national projects, including the Giant Sea Wall and the Jakarta–Surabaya High-Speed Railway (KCJS).
He stated that several major infrastructure projects requiring substantial investment will be presented, with opportunities open to both domestic and international private investors. Agus emphasised that strong collaboration between the government and the private sector will be critical to the success of national infrastructure development over the next five years.
ICI is expected to serve as a strategic platform for Indonesia to strengthen international cooperation and attract large-scale investment for sustainable infrastructure development. Beyond this event, Agus has also been actively promoting Indonesia's infrastructure investment potential to international partners in the United States. He stressed that wherever possible, Indonesia continues to highlight its upcoming projects to increase global awareness and encourage necessary investments.
The Giant Sea Wall project aims to protect coastal areas, particularly Jakarta, from flooding and rising sea levels. Presidential Special Envoy for Climate and Energy, Hashim Djojohadikusumo, previously revealed that the giant seawall in northern Java will stretch 700 kilometres, spanning Banten to East Java. He noted that the project is crucial to safeguarding millions of hectares of farmland from rising seawater levels.
The proposal for the seawall construction has existed since 1994, when President Soeharto’s administration first recognised the threat of rising sea levels. Given current environmental challenges, Hashim believes that the seawall initiative remains highly relevant and should be implemented without delay.
The Jakarta–Surabaya High-Speed Railway represents a major step forward in enhancing national transport connectivity through advanced and environmentally friendly technology.
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