Indonesia Infrastructure Guarantee Fund

Guarantee underwriting decisions are made by the Board of Directors, currently led by Acting President Director and Business Director Andre Permana. The fund is governed by a Board of Commissioners chaired by Hadiyanto, former Director General of State Assets. Ultimate authority rests with the Ministry of Finance, which is the sole shareholder and sets the fund's mandate.

Projects enter the pipeline through Indonesia's PPP framework, typically identified by the Ministry of National Development Planning or line ministries. PT PII evaluates projects that have reached the pre-feasibility stage and require a government guarantee to achieve financial close. The fund also works with the IIGF Institute and academic partners like the UNIID network to strengthen project preparation capacity upstream.

PT PII is a guarantee institution, not an equity investor or direct lender. It issues contingent liabilities that backstop specific government performance obligations within PPP contracts — such as compensation for land acquisition delays or tariff shortfalls. It does not make principal investments; it only pays out when a guaranteed risk event occurs.

Both are Special Mission Vehicles wholly owned by Indonesia's Ministry of Finance, but they serve different functions. PT SMI provides direct financing, equity, and advisory for infrastructure projects. PT PII provides guarantees against political and regulatory risks, making projects bankable for private lenders. They often co-appear on government-supported infrastructure financings as complementary instruments.

The fund guarantees infrastructure projects across transport (toll roads, railways, ports), energy (power generation, transmission), water supply, and telecommunications. The common denominator is a PPP framework where the government's contractual obligations require a credit enhancement to attract private debt. Notable activity includes the Trans-Java Toll Road network and regional water systems.

Initial capital of Rp 1.5 trillion was provided through a World Bank loan. The fund's guarantee capacity is subsequently supported by state budget allocations and retained earnings. Since PT PII is a single-mandate government institution, it does not raise external capital from investors and its balance sheet is fully sovereign-backed.

PT PII's mandate is limited to guaranteeing infrastructure projects within Indonesia. Its role is defined by Republic of Indonesia law and focused exclusively on domestic PPP transactions. It does not provide cross-border guarantees or invest in assets outside the country.