Written by Ministry of Finance of Republic of Indonesia
11 April 2019

Date of effectiveness: 2012

VGF is a government support in the form of contribution of some of the construction cost, given in cash to a PPP project that already economically viable but has not had a financial feasibility.  VGF can be given when there is no other alternative to make the PPP project financially feasible. Local Government can contribute to the provision of this support after obtaining the approval of Local Parliament.

The benefits of VGF are: Reduces the project cost to be borne by private parties:

  1. Increases the financial feasibility of PPP projects that attract interest and participation of the private sector.
  2. Increases the certainty of the procurement of project company in accordance with the quality and the planned timeline.
  3. Delivers public service at an affordable tariff for the community.