27 Feb 2026
Strengthening the PPP Ecosystem: Key Enhancements under Bappenas Reg 9/2025

On 30 December 2025, the Minister of National Development Planning/Head of the National Development Planning Agency (Kementerian Perencanaan Pembangunan Nasional (PPN)/Badan Perencanaan Pembangunan Nasional (Bappenas)) issued Bappenas Regulation No. 9 of 2025 (“Bappenas Reg 9/2025”), amending Bappenas Regulation No. 7 of 2023 on Public Private Partnership (PPP) Implementation (“Bappenas Reg 7/2023”) effective as of 31 December 2025. While Bappenas Reg 7/2023 established a comprehensive PPP regime, implementation over the past two years revealed several areas that could benefit from clarification and enhancement, particularly on PPP agreement amendments, financial close certainty, the determination of PPP forms, and the treatment of ancillary revenue.

In response, Bappenas Reg 9/2025 aims at providing clearer rules and a more detailed framework for financing sources as well as expanding infrastructure eligibility. Collectively, these updates are intended to strengthen bankability aspects of Indonesia’s PPP practices to align more closely with international standards.

The key updates under Bappenas Reg 9/2025 are summarized below.

Legal Certainty on Financial Close

Bappenas Reg 7/2023 required an Implementing Business Entity (“IBE”) to achieve financial close within 12 (twelve) months from execution of the PPP agreement. Where delays were attributable to the IBE, extensions could be granted up to 2 (two) times, each for a period of six months. However, Bappenas Regulation 7/2023 did not address whether extensions are allowed for delays that are not caused by the IBE. 

Bappenas Reg 9/2025 clarified this by expressly allowing extensions for delays not attributable to the IBE. In such cases, Government Contracting Agencies (“GCAs”) may grant an initial six-month extension, with the possibility of a further discretionary extension if justified. This change provides regulatory clarity in the event the PPP project faces financing delays that are beyond the control of the IBE.

Post-Signing Amendments to PPP Agreements 

Previously, under Bappenas Reg 7/2023, post-signing amendments to a PPP agreement can generally be done with the consent of both the GCA and the IBE, and only if all the following conditions were met:

1. The project structure remained unchanged;

2. The project’s financial feasibility was not affected;

3. Risk allocation was not modified;

4. Pre-established bidding parameters were maintained;

5. Service levels were not reduced; and

6. No additional government obligations were introduced.

Bappenas Reg 7/2023 did not specify the types of post-signing amendments that can be done. This has now been clarified by Bappenas Reg 9/2025 and the types of post-signing amendments that can be done includes:

1. Adjustments to capital expenditure (investment) values;

2. Introduction of new revenue sources for the IBE, as long as they are not explicitly restricted in the PPP agreement;

3. Changes to operational and maintenance procedures, provided they do not conflict with the PPP agreement, technical specifications, or pre-agreed service output standards; and

4. Changes to subcontractors and/or consultants engaged by the IBE, with GCA approval if required, provided the quality of services is not affected.

This clarification provides flexibility to accommodate changes to signed PPP agreements, while preserving key project parameters and risk allocations.

Illustrative Examples of PPP Forms by Infrastructure Type 

Under Bappenas Reg 7/2023, the GCA can determine the most suitable PPP form by considering the full project life cycle—covering scope, duration, phasing, third-party involvement, use of state or regional assets, and ownership arrangements during and after the PPP term. However, Bappenas Reg 7/2023 does not provide concrete examples of PPP forms. 

Bappenas Reg 9/2025 fills this gap, offering detailed guidance and illustrative examples to assist the relevant stakeholders in selecting the appropriate PPP structure.

When deciding on PPP structure, the GCA may combine different PPP stages, allowing the project to cover some or all parts of the PPP process, including financing, design, construction, operation, development or revitalization, maintenance, asset handover, and/or transfer of asset management. The appropriate combination will depend on the project’s specific needs and risk allocation. The following table summarizes illustrative PPP forms and their application across selected infrastructure sectors. 

Not all PPP schemes require the transfer of infrastructure assets to the government at the end of the cooperation period, particularly where projects do not receive Government support from state budget (“APBN”) and/or regional budget (“APBD”) and the return on investment is not sourced from APBN and/or APBD, subject to applicable sectoral regulations. 

Bappenas 9/2025 further elaborates that projects involving design and construction only are generally excluded from PPP classification, since risk is often unevenly distributed. In design–build projects, private partners often have limited incentives to ensure and maintain asset quality or durability, and subsequent costs are usually managed by the GCA.

On the other hand, project focusing solely on operation and maintenance can be classified as PPP if there is meaningful risk transfer, a performance-oriented private partner, and a long-term contract. Unlike Joint Operations (KSO), which mainly involve operational task-sharing without significant risk transfer, PPPs require private sector contributions of capital or technology, operational/commercial risk transfer, and long-term, performance-based management. The private sector’s goal in PPPs is to enhance asset value, while KSOs generally do not have this requirement.

Expanding and Updating Eligible Infrastructure Sectors

Another important enhancement in Bappenas Reg 9/2025 is the expansion of infrastructure types eligible for PPP development. In addition to refining existing sectors, the regulation introduces three new categories:

• Smart City Infrastructure (digital public services, intelligent traffic systems, IoT‑based city management)

• Quarantine Infrastructure (installations, laboratories, and/or auxiliary quarantine facilities)

• Conservation and Natural Ecosystem Infrastructure (mangrove and reef restoration, eco‑tourism facilities, environmental monitoring tools, carbon‑related facilities)

Across transport, water, waste management, buildings, fisheries, and industrial ecosystems, Bappenas Reg 9/2025 also provides more detailed subsector definitions. 

Danantara’s Strategic Input in the Prefeasibility Stage

Bappenas Regulation 9/2025 explicitly provides for the possibility of GCAs involving institutions such as Danantara during the prefeasibility stage,  particularly on matters related to project bankability, risk allocation, and funding structure. In doing so, GCAs may also seek input from other financing institutions and relevant government entities as part of the prefeasibility study process. 

Expanded Examples of PPP Financing Sources 

Bappenas Reg 9/2025 provides examples of financing sources for the PPP project financing, which were not specified in detail under Bappenas Reg 7/2023. Under Bappenas Reg 9/2025, financing for PPP projects may originate from loans and/or other lawful financing mechanisms in accordance with prevailing laws and regulations. Such financing may include, among others, (i) senior financing, (ii) mezzanine financing, (iii) financing from banks and/or Islamic financial institutions, (iv) project-based securities or capital market instruments (including bonds and sukuk), (v) infrastructure-related funding and land value capture mechanisms, and (vi) other financing methods permitted under the applicable regulations. In addition, the regulation expressly distinguishes financing sourced from lenders, such as loans from shareholders, pre-financing by contractors, and other lawful lending structures, thereby providing greater legal certainty on acceptable financing arrangements for the financing of PPP projects in Indonesia. 

Ancillary Revenue as “Other Lawful Forms of Investment Return” 

Bappenas Reg 7/2023 recognizes three forms of PPP investment return, namely user charges in the form of tariffs, availability payment, and “other lawful forms of return”. Bappenas Reg 9/2025 provides important clarification to this framework by explicitly recognizing ancillary revenue as one form of “other lawful forms of return”. 

Bappenas Reg 9/2025 confirms that income generated from ancillary business activities may be treated as project revenue, provided that such activities support the core function of the PPP project and fall within the scope of PPP. Where ancillary activities are carried out on government land or assets, compliance with the applicable State Property (BMN)/ Regional Government Property (BMD) utilization regime is required, including any associated fees payable by the IBE. 

The GCA is also required to ensure that the scale of ancillary activities is assessed realistically so that they can enhance the overall project financial feasibility without altering the primary objectives of the PPP. Examples of the permissible ancillary revenues include among others any income from the sale of by-products generated by waste management infrastructure, rental income from commercial areas within public rental housing projects, and rental income from commercial spaces and/or fuel stations within toll road infrastructure projects. 

Transitional Provisions 

To ensure continuity of ongoing PPP projects across all stages: 

• PPP projects that are in the planning or preparation stage at the time the regulation comes into force may complete those stages in accordance with the regulatory framework applicable prior to Bappenas Reg 7/2023, provided that such planning or preparation is completed no later than 1 (one) year as of 31 December 2025.

• Projects that have completed the planning or preparation stage and fulfilled the required documentation may proceed to subsequent PPP stages in accordance with Bappenas Reg 7/2023, provided that any additional requirements under Bappenas Reg 9/2025 to proceed to subsequent PPP stages must also be complied with. 

• PPP projects that are already in the transaction stage or management stage prior to the enactment of Bappenas Reg 9/2025, must complete all remaining processes and documentation in accordance with Bappenas Reg 9/2025.  

ABNR Commentary

Bappenas Reg 9/2025 reflects Indonesia’s continued commitment to refining its PPP framework in line with practical experience and international best practice. By clarifying key concepts, introducing new infrastructure categories, strengthening governance of financial close and PPP agreement amendments, and expanding permissible financing mechanisms, the regulation provides a clearer and more confident environment for both public and private stakeholders.

For GCAs, the amendments offer greater certainty, flexibility and support in achieving key milestones of the PPP project and stronger procedural guidance. For investors and lenders, they enhanced clarity on financing, risk allocation, and revenue streams strengthen the bankability of projects within the national PPP pipeline.

As Indonesia accelerates private sector engagement in infrastructure delivery, Bappenas Reg 9/2025 provides an important and timely step toward a more resilient and investment‑ready PPP ecosystem.

By partners Emir Nurmansyah (enurmansyah@abnrlaw.com), Serafina Muryanti (smuryanti@abnrlaw.com), Maher Sasongko (msasongko@abnrlaw.com), and associate Adya Sepasthika (asepasthika@abnrlaw.com).

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.