BAPPENAS Regulation No. 9/2025: Key Amendments to Indonesia’s Public-Private Partnership (PPP) Framework

At the end of 2025, the Ministry of National Development Planning/National Development Planning Agency (Bappenas) issued Regulation No. 9 of 2025, amending Regulation No. 7 of 2023 on the Public–Private Partnership (PPP) framework.

This latest issuance represents a calibrated refinement of Indonesia’s PPP regime, aimed at enhancing procedural clarity, expanding structuring flexibility, and strengthening institutional responsiveness. The amendment forms part of the Government’s ongoing efforts to improve transaction efficiency, reinforce commercial viability, and align PPP implementation with evolving infrastructure delivery needs.

Regulation No. 9 of 2025 introduces adjustments across multiple dimensions of the PPP lifecycle, including project classification, delivery modalities, documentation responsibilities, contractual amendment standards, institutional appointment mechanisms, and transitional provisions.

Rationale of New Policy 

The amendment reflects the Government’s recognition that, while the existing PPP framework has facilitated significant infrastructure development, practical experience has identified areas requiring recalibration. Market participants have observed that certain structural features of the previous regime constrained transaction efficiency, limited structuring alternatives, and introduced procedural rigidity during preparation and transaction stages.

Historically, PPP projects in Indonesia have predominantly relied on the Design–Build–Finance–Operate–Maintain–Transfer (DBFOMT) model, which presupposes eventual asset transfer to the Government. While this model remains available, the growing diversity of infrastructure sectors and financing approaches has necessitated a more adaptable regulatory platform.

Regulation No. 9 of 2025 introduces adjustments to the allocation of roles, risk considerations, and commercial parameters between contracting agencies and private sector participants. By refining project categorization, clarifying amendment criteria, adjusting documentation obligations, and formalizing alternative delivery modalities, the updated framework establishes a more structured basis for PPP implementation across sectors.

Summary of Key Policy Changes

Expansion of PPP Delivery Models

To address the practical limitations arising from the historical reliance on a single dominant structuring approach, the amended regulation formally expands the range of PPP delivery models that may be applied. While the Design–Build–Finance–Operate–Maintain–Transfer (DBFOMT) structure remains available, Regulation No. 9 of 2025 now expressly accommodates alternative modalities, including Design–Build–Operate–Maintain (DBOM), Design–Build–Finance–Operate–Own (DBFOO), and long-term Operate–Maintain (O&M) arrangements.

These modalities differ primarily in the allocation of financing responsibility, asset ownership, and operational risk between the Government and the private sector. Under the DBOM model, project financing is undertaken by the Government, while the private partner is responsible for design, construction, operation, and maintenance, with payments linked to performance and availability standards. Under the DBFOO model, business entities may retain ownership of infrastructure assets throughout the cooperation period, without any obligation to transfer the assets to the Government upon expiry of the contract term. In contrast, long-term O&M-based PPPs focus on sustained service delivery rather than asset development, with performance-based payments tied to service quality and operational outcomes.

Refinement of Investment Return Structures

The amended regulation also strengthens the framework governing investment return mechanisms. While user charges, availability payments, and other conventional forms of return remain recognized, Regulation No. 9 of 2025 provides more detailed guidance on how investment returns should be identified and structured during the project preparation stage.

This clarification is particularly relevant for projects where traditional revenue streams may not, on a standalone basis, sufficiently support project financing. The regulation acknowledges that ancillary revenues may form part of the private party’s return, provided that such activities remain aligned with the primary function of the PPP project and comply with public asset utilization requirements. This approach introduces greater flexibility in developing commercially viable and innovative financing schemes.

PPP Projects Without Mandatory Asset Transfer

A notable development under Regulation No. 9 of 2025 is the clarification of PPP structures that may be implemented without mandatory asset transfer at the end of the cooperation period. This provision responds to arrangements where asset ownership is not a defining feature of the cooperation structure.

Such models may be applied where the project does not receive government support in the form of fiscal contributions, partial financing, or availability payments, and where the arrangement remains consistent with applicable sectoral regulations. The regulation further clarifies handback provisions in circumstances where operational control, rather than ownership, is returned to the Government.

Redefinition of Small-Scale PPP as “Simple PPP”

This redefinition replaces the terminology of “Small-Scale PPP” (KPBU Skala Kecil) with “Simple PPP” (KPBU Sederhana) within the regulatory framework. The amended regulation associates this revised classification with PPP projects subject to simplified procedural arrangements, distinguishing them from projects governed by the standard PPP process.

Adjustment to Feasibility Study and Design Responsibilities

Regulation No. 9 of 2025 revises documentation obligations at the transaction stage. Under the previous framework, the bidding winner was required to prepare the full feasibility study and detailed design documentation. The amended regulation adjusts this requirement so that the bidding winner (through the Implementing Business Entity) is responsible for updating the pre-feasibility study and relevant design documentation.

Furthermore, the obligation to prepare design documentation does not apply where the selected PPP modality does not include design and construction activities. This adjustment aligns documentation responsibilities with the actual scope of the PPP structure.

Appointment of International Project Preparation Agencies

The regulation clarifies the mechanism for appointing international institutions or organizations as Project Preparation Agency. The Government Contracting Agency may appoint such institutions through a Panel of International Project Preparation Agencies, either by agreement or direct selection, provided that Indonesia is a member of the relevant institution and the institution’s charter, articles of association, or internal regulations do not permit participation in competitive procurement processes. This allows for the Government Contracting Agency to directly negotiate with multilateral development agencies that meet these requirements for potential assistance in project preparation and transaction.

Where these conditions are not satisfied, selection must proceed through direct selection from the established Panel. This provision establishes a defined procedural basis for engaging multilateral institutions during project preparation.

Clarification of Criteria for Amendment of PPP Agreements

Regulation No. 9 of 2025 introduces clearer parameters governing amendments to PPP agreements. In addition to existing requirements, any modification must maintain or improve the PPP’s Value for Money (Nilai Manfaat Uang KPBU) and must not result in an increase to the baseline internal rate of return assumption.

Expanded Conditions for Project Initiation Change (from Unsolicited Project to Become Solicited Project)

The amended regulation expands the circumstances under which PPP projects may transition from unsolicited project to become solicited project. In addition to cases where a prospective initiator withdraws, transition may also occur where the Government Contracting Agency rejects the proposed PPP initiative or the PPP proposal expires.

This clarification provides additional procedural certainty during the initiation stage.

Expansion of Eligible Infrastructure Sectors

In addition to adjustments in project structuring, the amended regulation expands the scope of infrastructure sectors eligible for implementation under the PPP scheme.

The regulation accommodates PPP implementation in sectors such as operation and maintenance technology investments in the drinking water sector through performance-based contracting, as well as quarantine infrastructure and smart city infrastructure initiatives. This expansion broadens the range of sectors that may be structured under the PPP framework.

Adjustment to Financial Closing Requirements

The regulation also introduces refinements to provisions governing financing closing, particularly in response to timing constraints commonly encountered in reaching financial close. Where delays are not attributable to the Implementing Business Entity, the Government Contracting Agency may grant an extension of up to six months, with the possibility of further extensions at its discretion. This adjustment is intended to mitigate financing execution risk and enhance overall transaction feasibility.

Transitional Provisions

The regulation provides that Ministers, Heads of Institutions, Regional Heads, Directors of State-Owned Enterprises, and business entities currently undertaking PPP transaction stages prior to the enactment of Regulation No. 9 of 2025 must continue their transaction processes and complete PPP documentation in accordance with the updated regulation.

This provision ensures procedural alignment for ongoing PPP initiatives.

Conclusion

Bappenas Regulation No. 9 of 2025 introduces a comprehensive refinement of Indonesia’s PPP framework, encompassing delivery model flexibility, documentation responsibilities, institutional appointment mechanisms, contractual amendment parameters, and transitional alignment.

By formalizing alternative modalities, clarifying amendment standards, adjusting feasibility documentation requirements, and recognizing simplified PPP classifications, the amended regulation establishes an updated regulatory platform for structuring infrastructure cooperation.

For project sponsors, investors, lenders, and contracting agencies, the revised framework provides expanded structuring options and clearer procedural parameters within Indonesia’s PPP regime.