PT SMI’s Blended Finance for Clean Energy - ¨Pradana Murti

PT SMI’s Blended Finance for Clean
Energy
Pradana Murti
Director
PT Sarana Multi Infrastruktur (Persero)
Jakarta
7 April 2022
1st Workshop on Blended Finance Guidance for Clean Energy

PT Sarana Multi Infrastruktur (Persero) | 2
Other setbacks caused by:
• Tariff policy
• Unsustainable business
model
• High interest rate
Lack of project readiness
due to inadequate process
preparation (including the
risks allocation framework)
Blended Finance
Solution
Use various
sources of funds
from various
stakeholders to
de-risk projects
and increase
bankability
Offers consultation
and project
development
service to improve
project qualities
and readiness
Synergy and
collaborate with
relevant
stakeholders and
strategic partners
Resources and public
sector’s limited ability on
budgeting, planning, and
preparation
SDG Indonesia One
as of February 2022
USD 3.23 Billion from
34 Partners
Challenges Platform Concept
SDG
Development
Facilities
SDG
De-risking
Facilities
SDG
Financing
Facilities
SDG
Equity
Fund
The Reason of Implementing Blended Finance is to Overcome Project
Preparation Challenges as a Bottleneck to Mobilize Private Capital

Grant
Financing
Technical
Assistance
PT SMI
Equity Investment
Product and
Deliverables
Senior Financing
Investment Financing
Working Capital
Financing
Bridge Financing
Take Out Financing
Promoter Financing
Junior Financing
Subordinated Financing
Mezzanine
PT SMI’s Product to Support Clean Energy
Government of Indonesia
100% ownership
Credit
Enhancement
De-risking

Financing Process in PT SMI to consider the use of Blended Finance
Pipeline to Financial Close
Identification Pre-Screening
Credit & ESS
Analysis & Rating
Execution Financial Close
Pre-screening:
1.PMK 100
2.KYC, AML
& CFT*)
Credit &
Investment
Committee
(Approved)
Term
Sheet
KYC: Know Your Customer AML: Anti Money Laundering CFT: Crime, Fraudulence & Terrorism ESS: Environmental & Social Safeguards
Disbursement Monitoring
Conditional
Disbursement
Disbursement
Verification
Disburse
Debtor Loan
Repayment
Covenant
Compliance
Project
Progress
Facility Disbursement & Monitoring
• On-Site and Off-Site Monitoring
• BoD Report (periodicaly)
CORPORATE
FINANCE
PROJECT
FINANCE
Corporate
Risk
Project
Risk
Credit
Enhancement
Final
Rating
AAA
AA
A
BBB
BB
B
CCC
CC
C
D
E
F
Non
Investment
Grade
INVESTMENT
GRADE
Only the corporation and project with
rating category of INVESTMENT GRADE can be
financed by SMI
Environmental
& Social
Due Diligence
(ESDD)
ESS
Corrective Action Plan (CAP)
ESDD
Report &
CAP
Requirement
ESS Corrective
Action Plan
(CAP)
Blended Finance Support through SDG Indonesia One
Gap Identification
Linkage to Government’s Priority Sector
(Energy, Transportation, Water Supply, etc)

PT SMI’s Clean Energy Projects Portfolio
No Remarks
1 Biomass Deli Serdang 9.9 MW
2 Minihydro Sako, Pesisir Sel 6 MW
3 Minihydro Lb. Gadang, Solok 8 MW
4 HydroPower Kerinci 350 MW
5
Minihydro Tunggang, Bengkulu 9.9
MW
6
Geothermal Dieng Small Scale 10
MW
7
Solar PV off-grid Sumba 492 kWp
(WC, paid off)
1
2
3
4
5
6
7
8
A
B
6
9
10
20
18
11
12
13
14
15
17
19
16
No Remarks
8 Biomass Merauke 3.50 MW
9
Biomass Situbondo and Lumajang 2x10
MW
10 Hydro Power Air Putih 21 MW
11
Minihydro Lau Gunung 15 MW (equity
bridge, paid off)
12 Minihydro Tara Bintang 10 MW (paid off)
13
HydroPower Humbahas 18 MW (paid
off)
14 Minihydro Situmulya 3 MW (paid off)
No Remarks
15 Hydro Power Asahan I 180 MW (paid off)
16 Wind Power Sidrap 75 MW
17
Microhydro Daya Tirta Banjarnegara 500 kW
(paid off)
18 Minihydro Padang Guci-2 2x3.5 MW
19 Minihydro Ma’dong 10 MW
20 Minihydro Besai Kemu 7 MW
A Geothermal Exploration, Waesano, Flores
B
Geothermal Exploration, Jailolo, North
Maluku
Total Commitment: Rp 3,965 T (~USD280 million)
Total Disbursement: Rp 2,365 T (~USD167million)

Implementation Model of Blended Finance
Structure in SDG Indonesia One
Senior Loan or
Equity Investment (Commercial)
Concessional Loan
Blended Finance Structure
Concessional loan with/without government
guarantees which could provide long term
financing and competitive rate which can
catalyst commercial financing
Description Program
Loan
Equity
Technical
Assistance
Grants originating from donor/philanthropy
which aim to build capacity to achieve
financial, economic and social objectives.
Senior Loan or
Equity Investment
Reimbursable Grant
Loan
Equity
Investment
Premium
Grants originating from donors/philanthropy
which aim to reduce credit risk by replacing the
non-refundable portion of loan repayments by
project owners.
Grants originating from donors/philanthropy
which aims to reduce the risk of capital
expenditure by providing grant support to
subsidize the capital expenditures.
Financing
(Long term and
competitive rate)
Type of Facilities
Development
(Early-Stage Risk)
Loan
Equity
Grant
Funding
• ADB SIO Green
Finance Facility
• AFD Financing facility
Grants for meeting project preparation costs for
viable rooftop solar projects ready to scale, and
is targeted explicitly at mobilizing debt finance
Solar Program (Supported
by Climate Works
Foundation
• USAID-SINAR Program
• European Climate
Foundation (ECF) Clean
Energy Program
WB - Geothermal
Resource Risk
Mitigation (GREM)
Program
European Union – AFD
Investment Premium
Scheme
De-risking
(Financing and
Credit Risk)

Project Description Pertamina Internal Solar Power Plant
Project Owner PT Pertamina Power Indonesia (‘’PT PPI’’)
Sector Eligibility Electricity
Project Location 29 locations of Fuel Terminal and New Gantry System (project details
attached)
Estimated Project
Value
USD5,753,352
Indication of Financing
Modalities
Private Loan
Existing Documents MoU between PPI and PT Pertamina Patra Niaga (“PPN”) Regarding the
Provision of Solar Power Plant in the PPN Group and/or Commercial &
Trading PT Pertamina (Persero)
PDF Needed Feasibility Study Preparation
Land Status No need for new land acquisition
(using existing buildings)
Project Information • All 29 locations where the Solar Power Plant will be installed are buildings
owned by PT Pertamina Patra Niaga with rooftop installation type.
• The concept of the business model that will be implemented is that the
owner of the building/land will rent the Solar Power Plant and the
facilities provided by PT PPI in accordance with the lease agreement.
• From the results of the temporary discussion of the 29 proposed
locations, there are 25 solar power plants that are planned to be
developed with capacities below 500 kVA. In accordance with Minister of
Environment Regulation Number 5 of 2012 and Minister of Environment
Regulation Number 16 of 2012, the project does not require an
environmental permit. Meanwhile, the other 4 PLTS locations are
indicated to have capacities above 500 kVA which require environmental
permits in the form of UKL/UPL.
PLTS Refinery Unit IV Cilacap
PT PERTAMINA (PERSERO)
PLTS Gedung Logistik PT Pertamina International Shipping
Case Study Blended Finance on Clean Energy Sector (Development):
Collaboration Between PT SMI and ClimateWorks Foundation
Grant for Feasibility Study in Solar Rooftop -- PT Pertamina Power Indonesia

Sector Electricity – Renewable Energy
Issuer Tamaris Hydro (Private Sector)
Issuance IDR 750,000,000,000 (~USD 52.4 million)
Tenor 3 years, 5 years, 7 years
Rating idAAA(sf)
Bond Issuer
Facility Details Credit Enhancement Facility
As an investment portfolio, these bonds are
relatively safe because the Tamaris Hydro Bonds
are supported by the Credit Enhancement
Facility (CEF) from PT Sarana Multi Infrastruktur
(Persero) with a maximum standby facility of IDR
750 billion. These funds can be used to fulfill the
Reserve Fund for Interest Payments and/or the
Reserve Fund for Repayment of Principal Bonds.
AAA
AA+
AA
AA-
A+
A
A-
AAA
Credit
Enhancement
Facility
Final Rating
Initial Rating
6 Notches
Upgrade
A-
Showcase Blended Finance (Development):
Collaboration Between PT SMI and Development Bank
Credit Enhancement Product to Support Clean Energy in Mobilizing Private Capital through Capital Market Instrument
Technical
Assistance
Support

Project Name Bayang Nyalo Minihydro Project
Location Pesisir Selatan, West Sumatera
Installed
Capacity
3 x 2 MW
Project Cost IDR 207 billion (~USD 14.4 million)
JCM Support
The Ministry of Environment Japan (MoEJ) applies the
carbon credit for RE project through JCM Creditting
Mechanism. The project owner benefits JCM Grant in the
form of discounted price of M&E equipment manufactured
by the Voith Hydro / Voith Fuji Hydro KK, Japan.
Facility Details Financing Structure
Senior
Loan
Equity
Project Sponsor
JCM provides partial
grant / discount for
M&E equipment, the
carbon credit is taken
by the MoEJ / Japan.
Est. CER:
17,242 tCO2-eq./year
Showcase Blended Finance (De-risking and Financing):
Collaboration Between PT SMI and JCM
Joint Crediting Mechanism (JCM) Support for Clean Energy Project

Grant
Renewable energy
Grant:
De-risking tools
Investment
Premium:
De-risking tools
Loan
Grant:
Pre-FS
Loan for Green Projects
Investment premium is intended as
de-risking tools
Funds are intended as support for
project management, project
preparation and capacity building
Collaborative Structure and Schemes Details of the Program
Concessional
Loan Clean Water in East Java
Development Bank
Grant
2
3
4
1
3
4
Concessional loan will be disbursed
in stages. Grant will be provided in
terms of Technical Assistance (TA)
and investment premium
1
2
1 1
European Union
Lower-carbon & efficient
energy generation
Energy efficiency
Non-energy GHG
reductions
Water
Waste & Wastewater
Infrastructures &
Urban Development
Transport
SDG Sector financing
including COVID-19
recovery program (30%
of Allocation)
Biomass Project
Credit Facility US$ 150 million
Maturity Up to 7 years including grace period
Grace Period Up to 3 years on principal repayments only
Program
Scope
• Eligible projects including adaptation and
mitigation activities with extension to health &
covid-19 recovery program up to max. 30% of
total amount of the credit facility
• Technical assistance & grant:
o AFD: EUR 600,000 for preparation &
implementation of AFD contributions to SIO
Development, De-Risking and Financing
Facilities
o EU: EUR 3 million for technical assistance &
EUR 2 million as an investment grant for de-
risking activities
Collaboration Between PT SMI and AFD Development Bank
Financing Facility & Investment Premium for Climate Change – Related Projects
Private Sector Projects

Collaborative Structure and Schemes Details of the Program
Project
Financing
Facility
The
SDG – GF
$ 1 billion
Facility
Private, Institutional,
Commercial Funds
Bilateral Donors
ADB
Green / Climate Funds
$ 150 m loan
funds from
ADB
SMI Commercial Funds
$
ADB Technical Assistance
Local Government Funds
Projects
Preparation
Facility
GREEN PROJECTS
PT SMI
SIO GFF
$
$ 1.35 m grants
Multiple of
funds into
projects directly
$
$ / IDR
GoI
GoI
To Support Green Projects
Credit Facility USD 150 million
Waste to Energy Mini Hydro
Grant
US$ 1.35 million for technical
assistance
Modality
Multi-tranche Financing
Facility (MFF)
Products
• Debt
• Equity investment
• Credit enhancements
Eligible
Sectors
(Green
Projects)
• Energy
• Energy Efficiency
• Transport
• Water
• Waste Management
• Land-use
• Adaptation infrastructure
Collaboration Between PT SMI and ADB Development Bank
Financing Facility & Grant for Green Projects

Project Name Air Putih Minihydro Power Plant
Location Bengkulu Province, Indonesia
Installed Capacity 3 x 7 MW
Project Cost IDR 670,870,000,000 (~USD 46.9 million)
Tenor
Senior Loan: 9 years
Sub-debt: 12 years
Facilities
Senior Loan: IDR 140,000,000,000 (~USD 9.79
million)
Sub-debt: IDR 100,000,000,000 (~USD 6.99
million)
Senior Loan
Equity
Private Sector
Facility Details Financing Structure
Junior Loan
/ Sub- Debt
Commercial Bank
Showcase Blended Finance (Financing):
Collaboration Between PT SMI and Commercial Bank
Financing through Senior and Sub Debt Loan

Project Profile
Notes
3 Tranche:
• Tranche A: Repayment of Existing Bank Loans on
behalf of the Debtor who has been operating
• Tranche B: Repayment of Existing Bank Loans on
behalf of the debtor and to finance the completion of
project development
• Tranche C: For payments and expenses (Financing
cost)
Project Structure
Investment
Cost
Rp 4,56
trillion
(~USD 321
million)
Facility of Private Bank
Rp 2,56 Trillion
(~USD 180 million)
(56,09%)
Facility of
PT SMI
Rp 2,00 Trillion (~USD 121
million) (43,91%)
Project
Financing Renewable Energy Projects
in Indonesia
Location Across Indonesia
Project Cost Rp 4,56 trillion (~USD 321 million)
SMI Portion Rp 2 trillion (~USD 121 million)
Projects SDG
•SDG 7 affordable and clean energy
•SDG 13 Climate Change
Showcase Blended Finance (Financing):
Collaboration Between PT SMI and Commercial Bank
Co-financing for Renewable Energy Projects

Gender Equality and Social Inclusion Implementation
2021 2022 2023 2024 2025
1. Formalize the
Gender Equality and
Social Inclusion
working group
2. Incorporating
Gender Equality and
Social Inclusion in
the Desa Bakti
untuk Negeri III
project
1. MIS/IT Development
2. Dissemination of
best practices
documentation on
the website as a
promotional media
1. Cooperation with IFI
2. Communication /
coordination with
the Ministry of
Women
Empowerment and
Child Protection
3. On-job training with
other banking
institutions
(IFI/TSKB)
1. Initiation of
collaboration with
NGO/university for
internal research
and promotion
2. Designing HR
programs and
gender-focused
budgeting
3. Distributing TA to
prospective debtors
1. Initiation of
collaboration with
NGO/university for
external research
and promotion
2. Prepare case studies
and impact
assessments
Timeframe and work plan
Support from USAID-SINAR
Support in early stages:
• Framework
formulation
• Assessment
design
Support from other SDG Indonesia One partners
Potential support from:
• ADB (SDG Indonesia One – Green Finance Facility)
• AFD
• KfW
• Bloomberg Philanthropies
• USAID-SINAR

ptsmi.co.id
infralib.ptsmi.co.id
@ptsmi
ptsmi_id
PT Sarana Multi Infrastruktur
(Persero)
Sahid Sudirman Center, Lantai 48
Jl. Jenderal Sudirman No. 86
Jakarta 10220, Indonesia
Telepon : (62-21) 8082 5288 (hunting)
Faksimile : (62-21) 8082 5258
Surel : corporatesecretary@ptsmi.co.id
PT Sarana Multi Infrastruktur (Persero)
Terima kasih,
Thank You

PT SMI’s Blended Finance for Clean Energy - ¨Pradana Murti

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PT SMI’s Blended Finance for Clean Energy - ¨Pradana Murti