September 30, 2019
Photo 1: Project site
Photo 2: Open dumping at the Bantar Gebang dumpsite in Bekasi , West Java province
On August 21, the Japan International Cooperation Agency (JICA) signed a Cooperation Agreement with the Ministry of Finance of the Republic of Indonesia, then on September 13 JICA concluded a Project Services Agreement with the International Finance Corporation (IFC:*). Under these contracts, JICA, in cooperation with the IFC, will provide Transaction Advisory Services in support of procurement procedures by the Indonesian Government agencies for selecting Private Project Operator in the Legok Nangka Waste to Energy Project in West Java province.
This is JICA’s first venture anywhere in the world into Transaction Advisory Services in support of Public-Private Partnerships (PPP).
While the amount of waste generated in Indonesia is increasing in step with the growing population and economy, the handling rate of household waste remains low. Furthermore, most of the waste is just landfilled at open dumping site without adequate sanitation measures, resulting in environmental problems such as foul odors, pests, and toxic gas emission, as well as contamination of ground water, and harmfully affecting the health of neighborhood. Legok Nangka Waste to Energy Project is the first PPP Waste to Energy project in Indonesia, addressing this enormous social issue. West Java province will collect waste from six local municipalities in West Java region and the waste will be delivered and burned in a waste-to-energy facility, where waste is converted into electricity.
Since 2011, JICA has been providing continuous technical cooperation to support preparation of the framework for PPP development in Indonesia. This newly lauched Transaction Advisory Services is going to support the Indonesian government’s procurement of Waste to Energy Private Project Operator (preparation of bidding documents and evaluation of proposals and so on) as well as related negotiations. Waste to Energy is one of the most difficult fields to achieve adequate profitability for private business entities, however through this cooperation, JICA aims to accelerate the development of PPP in Indonesia.
At last, through this Transaction Advisory Services, JICA aimes at promoting appropriate waste management and positively contributing to advancement of PPP system in Indonesia.
* IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, IFC use its capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity.