PT Sarana Multi Infrastruktur (Persero) Spirit, Motivation and Integrity

1. INVESTMENT BOOK PT Sarana Multi Infrastruktur (Persero) Spirit, Motivation and Integrity 2010 PT SARANA MULTI INFRASTRUKTUR (PERSERO)BRI Building Tower II 29th Floor Suite 2905 Jln. Jend. Sudirman Kav 44-46, Jakarta Tel. +62-21-5785 1313 Fax. +62-21-570 9460www.ptsmi.co.id

2. About PT SMI

3. PT SMI at a Glance Establishment 26 February 2009 Ownership 100% Owned by The Government of Indonesia Total Portfolio Rp 1 trillion (+ USD100 million) Types of Financing • Loan (senior & subordinated) • Mezzanine • Equity

4. Our Vision and Mission Vision • To serve as a leading catalyst of the national infrastructure development acceleration program Mission • To become a strategic partner of the government in promoting and accelerating the infrastructure development growth in Indonesia by establishing synergy with private sectors Motto • Spirit – Motivation – Integrity

5. Our Objectives as the Leading Infrastructure Financing Institution to become a catalyst to promote PPP to provide alternative source of financing

6. Our Unique Role Acceleration of Infrastructure Development • Building strong partnerships with private sectors, State-Owned Enterprises, Local Governments, Central Government, Multilateral Instiutions ( World Bank, ADB, IFC, etc) and other parties in improving the capacity of infrastructure fund. Financing Activities • Conducting financing activities to various infrastructure related sectors in a form of debt financing, equity and mezzanine financing. Promoting PPP • Promoting public private partnership schemes in an effort to accelerate infrastructure development in Indonesia. Providing Investment Support • Providing any support which may be required to domestic and international investors such as advisory and other related activities to attract new investments and improve appetite in infrastructure investment in Indonesia. Research, Development & Socialization • Conducting research, development and socialization in infrastructure financing in Indonesia. Other Related Activities • Other acitivities related to the acceleration of the infrastructure development.

7. Shareholding Structure Ministry of Finance 100% ownership PTSMI JV Co JV Co PT IIF* Third Parties Founders • Public & Private Sector • Private Funds • State Owned Enterprises • Banks • Local Governments • Multilateral Organizations (World Bank, ADB, etc.) • PTSMI • ADB • IFC • DEG Investment in Infrastructure Projects PTSMI to promote Public Private Partnership to accelerate infrastructure development in Indonesia *PT Indonesia Infrastructure Finance

8. Partnership Schemes with PT SMI Business Model A Business Model B Business Model C Private Sector Investor PT SMI Private Sector Investor PT SMI • Source of Fund • Multilateral Institutions • Bilateral Institutions • Government Institutions • Infrastructure Funds • Pension Funds • Donor Countries Equity Dividen Dividen Loan repayment Loan channeling Co-financing JV Loan repayment/ Dividen Loan repayment/ Dividen PT SMI Loan repayment/ Dividen Loan/ Equity Loan/ Equity Loan/ Equity Loan repayment/ Dividen Projects Projects Projects

9. We Provide Funding to Various Infrastructure Projects Toll-Road & Bridges Transportation Water Supply Irrigation & Waterway Oil & Gas Power Generation Telecommunication Waste Management

10. Flexible and Innovative Financing Scheme Loan Mezzanine Equity Infrastructure Projects PT SMI provide financing to infrastructure projects through various financing schemes including loan, mezzanine and equity

11. Investment Climate

12. Why Investing in Indonesia?  Long list of identified and potential projectsspread accross various sectors  Significant public sector financing gap Almost all sectors have been reformed into a market and PPP-friendly sector including space provided for private sector to propose/initiate a project  The Government provides various means of support including direct/non-contingent support such as land provision and contingent support or Government guarantee  An improving investment climate indicated by a recent and much anticipated upgrade of Indonesia’s Sovereign Credit Rating from BB-to BB by Standard & Poor’s 

13. Returns have been Encouraging over the Past Years Source: Indonesia Stock Exchange (www.idx.co.id) Return on investment has been encouraging as indicated by the performance in the Goverment bonds and stock markets

14. Increased Activities in the Market IDR Trillion Dec 2006 Feb 2010 Source: Indonesia Stock Exchange (www.idx.co.id) Source: Indonesia Stock Exchange (www.idx.co.id) • Increasing trend of fund raising toward the the infrastructure sectors especially through the stock and domestic bond markets • Infrastructure stocks over the past 10 years has been outperforming the composite index • The level of outstanding corporate bonds has increased by 49% between December 2006 and February 2010 from IDR 61.2 trillion to IDR 90 trillion • The share of infrastructure, utilities and transportation sectors has also increased from 26% to 33%

15. Public Private Partnership and Government Support Public Private Partnership Perpres 67/2005 juncto Perpres 13/2010 on Public Private Partnership • Contracting agencies: Line Ministries, Regional/Local Governments, State Owned Enterprises or Regional/Local Government Owned Enterprises • A private sector (the initiator) who proposed for an accepted unsolicited project to the Government will be compensated during tender process with: • An additional score (maximum 10%) of the score given to the initiator; or • A right to match the bid value of the lowest bidder; or • The Government will buy out the proposal’s intelectual property right from the initiator • The Government can provide various supports in the form of fiscal support, required permits, tax incentive, land provision, and financial compensation through PT PII • Any transfer of consortium membership or share ownership prior to project being operational is permitted as long as it will not delay project construction Land Acquisition Land Acquisition Policy • Existing policies: UU 20/1961, Perpres 36/2005, Perpres 65/2006 and Head of BPN (National Land Body) Regulation 3/2007 • A new Act to be signed later this year that will provide a base for a fair, firm and resolute land acquisition process Other Supporting Regulations Other • Permenko Economy 3/2006 on project priority procedure • Permenko Economy 4/2006 on project evaluation for government support • PMK 38/2006 on government support

16. The Synergy in Infrastructure Development Acceleration Government of Indonesia Investor / Lender Land Fund Guarantee Fund (PT PII*) Regulatory Reform and Capital Market Infrastructure Fund PT IIF PT SMI Project Financing Land Acquisition Cost Recovery / Political Risk Preparation Bidding Construction Operational * PT Penjaminan Infrastruktur Indonesia PT SMI is an integral part of the Government’s scheme in supporting the infrastructure development Public Source: The Government’s Risk Management Unit (elaborated) Private

17. Main PPP Projects Project Est. Project Cost (USD million) Status Central Java Coal-Fired Power Plant 3,000 RFP was issued on February 2010 Manggarai-Soekarno Hatta Airport Railway 700 RFP will be issued on April 2010 Umbulan Water Supply 200 EOI will be issued on April 2010 Jatiluhur Water Supply Project 380 Project Preparation Bandung Waste to Energy 50 EOI will be issued on April 2010 Tanah Ampo Cruise Terminal 75-100 Project Preparation Central Kalimantan Coal Railway 1,500 EOI will be issued on March 2010 Kota Bandung Integrated Terminal 25 Project Preparation Kertajati International Airport 1,400 Project Preparation Jakarta Monorail 475 Project Evaluation for Re-tender Cisumdawu Toll Road 590 Land Acquisition and Government Support Medan-Kualanamu-Tebing Tinggi Toll Road 476 Land Acquisition and Government Support Tanjung Priok Access Toll Road 641 Construction Selat Sunda Bridge 10,000 Project Preparation Source: Directorate for PPP Development, Bappenas (http://pkps.bappenas.go.id/)

18. Sectoral Review

19. PPP Sectoral Review – Toll Road road is like the main artery of the economy... Law & Regulation • UU 38/2004 on public roads • PP 15/2005 on toll roads and PP 44/2009 on motorcycle use in a toll road Contracting Agency Badan Pengatur Jalan Tol (BPJT)/ Indonesia Toll Road Authority (an agency under the Ministry of Public Works) Licensing & Permits • Tendering process usually takes around 14 months to complete and Perjanjian Pengusahaan Jalan Tol (PPJT)/ Toll Road Business Agreement finalization would take around 4-6 months • Operational permit will be issued by BPJT once the construction meets the worthiness standard provided by the Ministry of Public Works Investment Thesis • 700km toll roads have been built up to date out of the 1,500km Trans Java and 3,000 Trans Sumatra master plans (not to mention other islands) • Roads cater for over 50% of traffic moved (passenger and goods) • High car ownership and use in big cities but nationally car ownership is only less than 1% of population, thus high potential for growth and needs for more roads • Land acquisition revolving fund, land freeze, land price and land capping facilities • Two-yearly tariff adjustment to provide certainty to investors • Attractive return on investment (especially on inner-city or short inter-city sections)

20. PPP Sectoral Review – Port let’s make Indonesia’s maritime history proud... Law & Regulation • UU 17/2008 on shipping • UU 39/2009 on special economic zone • PP 61/2009 on port Contracting Agency • Otoritas Pelabuhan/Port Authiority (or, in the absence of Port Authority, Pelindo - a State Owned Enterprise in port operation - in getting development license and in port operation from the Ministry of Transportation); or • Special Economic Zone (SEZ) Administrator in the case of SEZ • The new Port Authorities will be established this year and will speed up progress in port development Licensing & Permits • Business permit from the Ministry of Transportation (and pending further regulations on SEZ) • Location, construction, and operation permits from the Ministry of Transportation or Regional/Local Governments depending on port status Investment Thesis • Under supply: 734 ports to serve 6,000 inhabited islands • Inter-island crossings : 131 existing crossings and 170 identified new crossing needs • As in other countries port plays a major part in trade and the economy as a whole

21. PPP Sectoral Review – Rail developing the railways will put Indonesian economy on the right track... Law & Regulation • UU 23/2007 on railways • PP 56/2009 on railways provision Contracting Agency • Ministry of Transportation or Regional/Local Governments depending on the project scope Licensing & Permits • Business, building, and operation permits from the Ministry of Transportation • Infrastructure construction, infrastructure operation, and rolling stock operation permits from relevant Contracting Agency • Obtaining permits are generally not an issue as long as technical & administrative requirements are met Investment Thesis • The country’s railway system stretches forapproximately 6,485km, of which just 125km is electrified • The majority of railway infrastructure lies in Java and parts of Sumatra • There has been no significant development in railway infrastructure in recent times to meet the need for alternative transportation • Low market share: rail accounts for 7.3% (passenger) and 0.6% (goods) • Indonesia big population needs extensive, affordable and reliable public transport system including the railways to move people and goods in masses

22. PPP Sectoral Review – Airport air transport is undoubtedly vital to this archipelagic country... Law & Regulation • UU 1/2009 on aviation • PP 70/2001 on airport Contracting Agency • Regional/Local Governments for airports owned by them • The Act awaits on further government regulations which will guide the implementation of the Act in more detail especially in providing tender guidelines Licensing & Permits • Development permit from the Ministry of Transportation • Operational certificate will be issued by the Ministry of Transportation once the airport has met the safety, security and service level standards Investment Thesis • Significant growth in domestic air transportation sector since the low cost airlines era began, hence additional investment is needed in new airports and extisting airport extensions • In 2008 the number of tourist arrivals was estimated at6.98mn, and this is set to increase to 9.28mn by 2012 • Futher market enlargement as ASEAN goes Open Sky in 2015 • Several Airport Authorities will be set up this year to ensure independent and professional airport governance particularly relating to safety and security compliance

23. PPP Sectoral Review – Power Generation electricity powers the economy and a sign of social welfare... Law & Regulation • UU 30/2009 on power • UU 27/2003 on geothermal • PP 10/1989 - PP 3/2005 - PP 26/2006 on electricity provision and usage • Permen ESDM 5/2009 on PLN off-take price guidelines • Permen ESDM 31/2009 on PLN off-take price on renewable energy guidelines Contracting Agency • PLN (state owned enterprise in electricity) to connect with PLN grid; or in other circumstances • Ministry of Energy and Mineral Resources (ESDM) or Head of Region • Independent Power Producer (IPP)signs Power Purchase Agreement (PPA) with PLN (off-taker party) Licensing & Permits • Obtaining a PPA is generally not an issue as long as technical & administrative requirements are met • Operational permit will be issued by PLN (for PLN grid projects) once the project passes the testing and commissioning stage Investment Thesis • Fixed and reliable buyer through PT PLN • To meet electricity shortage and growing demand, Indonesia has plans to develop 35.7 GW between 2009-2018 which involves IPPs • Extensive untapped renewable energy resources (e.g. geothermal, biogas and hydro)

24. PPP Sectoral Review – Oil and Gas (transmission and distribution) Indonesia has energy resources in abundance... Law & Regulation • UU 22/2001 on oil and gas • PP 36/2004 - PP 30/2009 on oil and gas down stream business Contracting Agency • BPH Migas (Downstream Oil & Gas Authority) • The PPP environment in the oil and gas downstream sector will be more developed with some adjustments to existing law Licensing & Permits • Business and storage permits from the Ministry of Energy and Mineral Resources • Quality and standards are determined and approved by the Ministry of Energy and Mineral Resources Investment Thesis • Indonesia has proven oil reserves of 4bn bbl and proven natural gas reserves of 3,000bcm • Indonesia has recently entered an un-tapped off-shore exploration market as demand for oil continues to increase • The world reliance on gas produced by Indonesia (world number two) signifies investment needs in the sector • Oil and gas have also been a significant primary energy in power generation where each account for 29% and 22% respectively

25. PPP Sectoral Review – Water Supply clean water for the present and the future... Law & Regulation • UU 7/2004 on water resources • PP 16/2005 on drinking water supply • Perpres 29/2009 on government guarantee and interest subsidy • Regional/Local regulation on water management Contracting Agency • Regional/Local Government owned enterprise; or in some circumstances • Regional/Local Governments • The Regional/Local Governments or their enterprise will also act as the off-taker Licensing & Permits • SIPPA (water exploitation license) issued by Regional/Local Governments • Decentralized – heavily influenced by regional/local policy Investment Thesis • Indonesian vast and growing population are in shortage of clean and drinking water (not to mention growing industrial and economic zones) • 75% of rivers in the country already being badly polluted • Still far away from reaching the 80% national network coverage to meet the MDG’s target in 2015 • Central/regional/local governments openness in sharing the work (e.g. government would provide the upstream infrastructures) • Joint cooperation between different administrations in water supply infrastructure provision to increase economic of scale

26. PPP Sectoral Review – Telecommunication what was once an invention is now a fastly growing basic need... Law & Regulation • UU 36/1999 on telecommunication • PP 52/2000 on telecommunication provision Contracting Agency • The Ministry of Communication and Information for close network projects • BRTI (Indonesian Telecommunication Regulatory Body) – a regulatory body under the Ministry of Communication and Information – for open network projects Licensing & Permits • The Ministry of Communication and Information issues licenses for closed network projects • BRTI issues licenses for open network projects Investment Thesis • Large population means very encouraging potential market size to tap in • Wireless market still has ample room to grow with penetration rate of around 50% (relatively low compared to neighbouring countries) • WiMAX existing market largely concentrated (around 75%) in the Greater Jakarta and Banten regions of which would only serve around 10% of the country’s population

27. PPP Sectoral Review – Waste Management waste is costly so let’s manage it... Law & Regulation • UU 18/2008 on waste management • Permen Environment 30/2009 on licensing and control over B3 (hazardous and toxic material) waste management • Regional/local regulation on waste management Contracting Agency • Regional/Local Governments • The Regional/Local Governments will also act as the off-taker Licensing & Permits • Location, transporting and processing permits issued by Regional/Local Governments • B3 waste management license from the Ministry of Environment • Decentralized – heavily influenced by regional/local policy Investment Thesis • An estimate of only 56% of the country’s population is currently being served • Almost all Final Dump Sites are operated in an open dumping system which would produce methane as a result – therefore an opportunity for CDM fund to be utilized in improving the system • Low society and private sector participation • Working privatization models implemented in waste management system in Greater Jakarta including successful power generation using waste as fuel • Cross administration boundaries cooperation to increase efficiency

28. PT SARANA MULTI INFRASTRUKTUR (PERSERO)BRI Building Tower II 29th Floor Suite 2905 Jln. Jend. Sudirman Kav 44-46, Jakarta Tel. +62-21-5785 1313 Fax. +62-21-570 9460corporatesecretary@ptsmi.co.id www.ptsmi.co.id Disclaimer Information provided in this material were taken from multiple sources and considered as true by the time they were written to the knowledge of PT Sarana Multi Infrastruktur (Persero). PT Sarana Multi Infrastruktur (Persero) can not be held responsible from any inacuracy contained in the material.