Regional Infrastructure Development Fund (RIDF)
Efforts to increase financing capacity to regional governments are through the Regional Infrastructure Development Fund (RIDF) which provides funding assistance for the regional loan business at PT SMI. The source of the RIDF came from foreign loans from multilateral institutions that were lent to PT SMI in the amount of a total of USD 200 million originating from the World Bank and the Asian Infrastructure Investment Bank amounting to USD 100 million each. RIDF uses a mechanism tha forwarding foreign loans through the Ministry of Finance of the Republic of Indonesia.
The Objectives of Regional Infrastructure Development Fund (RIDF)
RIDF is intended to increase access to finance for regional government infrastructure projects through financial intermediary. The objectives of the RIDF are:
- overcome the high fiscal dependence of the regional government on the central government, namely by encouraging the creation of regional fiscal discipline to ensure the sustainability of regional infrastructure provision;
- answering the financing needs of infrastructure development in the region by providing loans ranging from small, medium to large loan sizes;
- increasing the capacity of local governments in managing loans, namely by forming a debt management unit and training of related personnel;
- overcome the limitations of local government in good project preparation, through the provision of Project Development Fund facilities (PDF) to assist local governments in developing infrastructure project pipelines and their preparation processes;
- increase the capacity of regional governments in implementing sustainable development projects through compliance/compliance with environment and social safeguards; and
- produce sustainable financial intermediary.
The Component of Regional Infrastructure Development Funds (RIDF)
The RIDF project is divided into two components:
1. Regional Infrastructure Development Fund (RIDF)
RIDF will provide direct loans in the form of senior debt to local governments that have fiscal capacity and borrowing capacity in accordance with the laws and regulations.
2. Project Development Fund (PDF)
Financing facilities that help and facilitate capacity development and assistance to local governments during the project preparation process through experienced consultants in the field of preparing feasibility assessment projects, sectoral expertise, detailed engineering design, and others.
Who gets this facility?
RIDF will be given to local governments at both the provincial and district/city, which are creditworthy in accordance with the laws and regulations. The criteria for local government eligibility for RIDF are as follows:
|1||The infrastructure to be financed is public infrastructure which is a regional priority and is listed in the RPJMD|
|3||The local government does not have loan arrears, either from lending or from other sources|
|4||Minimum Debt Service Coverage Ratio (DSCR) of 2.5 times (as stipulated in PP 30/2011)|
|5||The remaining amount of the loan plus the number of loans to be withdrawn does not exceed 75% of the total general revenue of the previous year's APBD|
|6||The limit of the maximum APBD deficit for the current year is in accordance with the laws and regulations|
|7||BPK Opinion on Regional Government Financial Statements in the last three years is at least Fair With Exception (WDP)|
|8||Get consideration of the Minister of Home Affairs|