Contingent support is a government guarantee to compensate a PPP project company, if a risk specified in the PPP contract happens. Here, the government guarantees the types of risk that it is in the best position to manage-for example, political, project performance, and demand risks-and for which there is an economic justification to do so. Project performance risk includes delays in land acquisitions, rising land acquisition costs, post-contract changes in performance specifications, lower-than-contracted tariff adjustments, and delays in operation.
To activate contingent support, the government contracting agency requests this, based on feasibility study findings. The request is reviewed by the Committee of Infrastructure Priorities Development Acceleration, evaluated by the Risk Management Unit, approved by the Ministry of Finance, and administered by Indonesia Infrastructure Guarantee Fund.