MARKET SOUNDING

Strategic Partner Selection for Intermediate Treatment Facility

(ITF) Development
in East & South Services Area of Jakarta

December 23rd, 2020

Disclaimer
This Market Sounding document is intended to provide preliminary information only to potential business partner/ selection participants and
other market sounding participants (the ‘respondents’). Sarana Jaya is still in the process of formulating its requirements in relation to the
Project. The description of the Project or Sarana Jaya's requirements in this document may change.

Respondents are to satisfy themselves in relation to the completeness, correctness and sufficiency of all information provided by Sarana Jaya
in connection with this Market Sounding process or in respect of the Project. Sarana Jaya is not bound by, and has no responsibility or liability
for any advice, representation or information given or furnished by or on behalf of Sarana Jaya in connection with this Market Sounding
process or in respect of the Project.

Sarana Jaya may use or incorporate any feedback, comments or other information provided by a respondent in connection with the Market
Sounding process on a non-attributable basis in preparing any tender or contract documentation in respect of the Project and in carrying out
the procurement in respect of the Project but will be under no obligation to do so. Respondents are not entitled to make any claim against the
Sarana Jaya in connection with Sarana Jaya's use or incorporation or failure to use or incorporate any feedback, comments or information
(wholly or partially, with or without modification) provided by a respondent in connection with the Market Sounding process. No respondent
is entitled to enquire into the basis of the Sarana Jaya’s decisions to use or incorporate (or otherwise not to use nor incorporate) such
feedback, comments or information.

In no circumstances will Sarana Jaya or any of its employees, agents or advisors be liable to a respondent whether in contract, tort (including
negligence, misrepresentation or breach of warranty), under statute (to the extent permitted by law) or otherwise for any costs, losses,
expenses or damages incurred or suffered by the respondent:
• in acting upon this document, in providing feedback, comments or information or in otherwise acting in reliance upon any information
provided by Sarana Jaya in relation to the Market Sounding process;
• arising out of or in connection with its participation in the Market Sounding process; or
• arising out of or as a result of the exercise, or failure to exercise, by Sarana Jaya of any of its rights under this Market Sounding exercise. 2
Outline

I Background

VI Project Financial Profile

II Legal Aspect
VII Indicative Project Structure

III MSW Generation & Proposed Capacity

VIII Major Risk Sharing

IV Technology Options
IX Project Timeline

V Project Profile

3
Background

DKI Governor Regulation No. 71 of 2020

on Assignment to Perumda
Development of Intermediate
Pembangunan Sarana Jaya (Sarana
Treatment Facility (ITF) aims to
Jaya) in the Implementation of
manage the waste generation in the
Intermediate Treatment Facility (ITF) in
East and South Jakarta Service Areas
the City for East and South Jakarta
Regions

4
Legal – Legal Basis

• Law 18/2008 on Waste Management

• Government Regulation (“GR”) 81/2012 on Management of Household and Household-like Waste
• Presidential Regulation (“PR”) 97/2017 on the National Strategic Policy of Waste Management
Waste Management • DKI Regional Regulation 3/2013 as lastly amended by DKI Regional Regulation 4/2019 on Waste Management
• Ministry of Public Works and Housing Regulation 3/2013 on Implementation of Solid Waste Infrastructure and
Facilities in Household Waste and Household-like Waste

• Law 23/2014 on Regional Government

• GR 54/2017 on Regional-Owned Enterprise (“ROE”)
Regional-Owned • Ministry of Home Affairs (“MOHA”) Regulation 118/2018 on ROE Business Plan, Work Plan and Budget,
Enterprise Cooperation, Report and Evaluation
• DKI Regional Regulation 2/1982 as lastly amended by DKI Regional Regulation 11/2018 on Perusahaan Daerah
Pembangunan Sarana Jaya DKI Jakarta

National Strategic • PR 3/2016 as lastly amended by PR 109/2020 on Acceleration of National Strategic Projects
Project • PR 35/2018 on Acceleration of the Development of Waste to Energy Plan based on Environmentally Friendly
Technology

ITF Development by
Sarana Jaya • DKI Governor Regulation 71/2020 on Assignment to Perumda Sarana Jaya in the Development of ITF in the City

5
Legal – Waste Management and ITF Implementation

Household waste is the • Facilitate, develop and conduct effort in waste reduction;
• Implement waste management and facilitate in providing the infrastructure
waste that derives from
Government duties and and facilities of waste management;
daily activity in the • Encourage and facilitate the development of benefits waste management
household which does authorities outcome;
not include human • Stipulate norm, standard, procedure and criteria in waste management;
excrement and specific • Facilitate and develop a partnership cooperation.
waste.
Partnership in waste The municipal government may establish a partnership with a business entity/
Household-like waste is management society in the waste management program by providing ITF.
the household waste
that derives from the
commercial area, The business entity carrying out waste management activities is entitled to a
industrial area, special Tipping Fee
tipping fee paid by the regional government.
area, social facility, public
facility, and/or other
• Be equipped with waste processing technology that is appropriate, tested, and
facilities.
environmentally friendly;
Requirements in providing • Be equipped with a pollution control facility;
• Taking into account the aspect of the geological environmental layout in
ITF location and surrounding;
• Taking into account the social aspect and economic of local society;
• Taking into account the financing feasibility aspect.
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Legal – ITF as National Strategic Project
• The Waste to Energy Development Program (PSEL) is included as a National Strategic Project (PSN) (the list of the
project is stipulated in PR 35/2018).
PR 3/2016 as lastly amended • A project that is classified as PSN is entitled to receive facilities and conveniences under PR 3/2016, including the
by PR 109/2020 ease of licensing, central government guarantee, adjustment in spatial planning and regional planning (RTRW) (if
the location cannot be moved).
• Prioritization of local components.

PR 35/2018
MOHA Regulation 118/2018
• Under PR 35/2018, PSEL project is the development of Waste to Energy plant based on environmentally friendly
technology through waste management, one of the PSEL locations is DKI Jakarta.
• Acceleration of the PSEL development became a regional government matter in which the regional government
may assign an ROE or hold a selection process for business entities.
• The projects listed PR 35/2018 may obtain incentive and conveniences, including the assignment mandated to
PLN to purchase electricity from the Waste to Energy plant and the designation of feed-in tariff that must be paid
by PLN.
• The electricity price purchased by PLN
1. Capacity up to 20 MW  USD 13,35 cent/kWh
2. Capacity more than 20 MW  USD 14,54 cent/kWh – (0,076 x the amount of WtE plant capacity that is
sold to PLN)
ROE may conduct cooperation with other party, with the following models: cooperation of asset utilization,
cooperation of equity participation (joint venture), and other cooperation in accordance with the laws and
regulations.

DKI Governor Regulation Under DKI Governor Regulation 71/2020, DKI Jakarta Governor has assigned Sarana Jaya to conduct the planning,
71/2020 funding, development, operation, maintenance, and technology utilization for the ITF project. 7
7
 Legal – Sarana Jaya Assignment (DKI Governor Reg. 71/2020)
• Reduce household and household-like waste at least
70% up to 90% with the appropriate and
environmentally friendly technology.
Purpose • Reduce TPST dependence on TPST outside DKI
Jakarta.
• Waste reduction strategy and waste handling in
accordance with the laws and regulations.
• Assign Sarana Jaya to implement ITF in the city (from
the waste processing until the final waste processing).
• Assignment is conducted based on the designation
service areas and designation of composition and
Assignment characteristics of waste (conducted by DLH (DKI
Environmental Agency)).
• Assignment covers the planning, funding,
development, operation, maintenance, and
technology utilization activities.
• ITF is built in DKI Jakarta Province.
• The land may be provided DKI Government/ Sarana
ITF location Jaya/ Partner (if provided by Sarana Jaya/ Partner,
Sarana Jaya/ Partner may cooperate with the land
owner).
• Sarana Jaya may appoint/ assign its subsidiary.
• Sarana Jaya may cooperate with a business entity and/or
others institution that has competency (in accordance with
Cooperation the laws and regulations).
• Cooperation is conducted with the win-win benefit principle,
professional, efficient, effective, in accordance with the good
corporate governance and laws and regulations.
Support is given in the form of:
- Prioritization of the Regional-Owned Assets (BMD)
management (if the project utilizes DKI Jakarta’s land, it will
be conducted in accordance with the mechanism of BMD
DKI Jakarta management).
Government - Prioritization of the licensing and non-licensing process.
’s Support - Fiscal and/or non-fiscal incentive.
- Tipping fee provision.
- Waste supply (based on the service areas, the study of waste
composition and characteristics and feasibility study that
have been approved by DKI Government).
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Legal – Key Approvals
License Issuer Applicant Description

Designation of Service Areas DLH (DKI Environmental Agency) - DKI Governor Reg. 71/2020

Designation of the composition and DLH (DKI Environmental Agency) - DKI Governor Reg. 71/2020
characteristics of waste
Board of Directors approval for the Sarana Jaya - Sarana Jaya BoD Decree
partner selection process
KPM/ Governor approval for the KPM/ Governor of DKI Sarana Jaya Government Reg. 54/2017
cooperation agreement between Sarana DKI Governor Decree 39/2002
Jaya and other parties DKI Regional Reg. 2/1982
Principle approval on the indicative Governor of DKI Sarana Jaya Supporting Documents for the
Tipping Fee (“BLPS”) amount Partner Selection Process
Approval for the cooperation related to DPRD DKI DKI Govt. -
the imposition of BLPS in the APBD
Approval of Central Government Ministry of Finance (“MOF”) DKI Govt. MOF Regulation 60/2017
Guarantee for National Strategic Project
Licenses and permits related to the SPV Ministry of Law & Human Rights, OSS, Ministry of Environment SPV, Partner -
company establishment as well as its & Forestry, DKI One Stop Service Center (PTSP), DKI Govt.,
business and operational activities National Standardization Agency (BSN)
Request for Power Purchase Assignment Ministry of Energy & Mineral Resources DKI Govt. -
to PLN
Licenses and approvals related to PLN/ PLN, Indonesian Investment Coordinating Board, Accredited SPV -
PPA Electrical Power Engineering Inspection Agency, Bank Indonesia 9
 MSW Generation and Proposed Capacity
ITF Zone 2 – East Jakarta
Project capacity of each zone is Source Area (Kecamatan)
proposed according to Kepdis DLH DKI Cilincing, Kelapa Gading, Cakung, Pulo Gadung, Duren Sawit,
Jakarta No 453/2019 and 732/2020 of Jatinegara, Kramat Jati, Pancoran, Tebet
Service Area Determination for
Waste Generation (Ton/Day)
Intermediate Waste Processing Facilities
At Bantargebang a) At Source Areab) Jakstrada Targetc)
1,380.88 1,726.10 1.208,27

Proposed ITF Capacity (Ton/Day)

Minimum Maximum Proposed

ITF Zone 4 – South Jakarta 1,380.88 1,726.10 1,700

Source Area (Kecamatan)

Cipayung, Pasar Rebo, makasar, Ciracas, Pasar Minggu,
Kebayoran Baru, Cilandak, Mampang Prapatan, Setia Budi,
Jagakarsa Note:
a) Referring to aggregate waste recorded from
Waste Generation (Ton/Day) each source area at Bantargebang Landfill
At Bantargebang a) At Source Areab) Jakstrada Targetc) from January – July 2019
b) Waste generation assumption at source area
1,259.52 1,574.40 1,102.08
= Total waste recorded at Bantargebang
Proposed ITF Capacity (Ton/Day) Landfill + 80%
c) Waste handling rate = 70% of waste
Minimum Maximum Proposed
generation at source area
1,259.52 1,574.40 1,500
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Technology options: MGI and MBT

1 Refer to “Laporan Awal Masterplan Manajemen Sampah Jakarta – DANIDA” and“Clinton Climate
Initiative Report”, Incineration with energy recovery and Mechanical Biological Treatment (MBT)
with Dry Anaerobic Digestion are recommended to be applied in DKI Jakarta

2 Proven technology. MGI and MBT are proven technology with more than 700 operational facilities
in 37 countries for MGI and approximately 570 facilities in Europe alone for MBT.

3 These two technologies are capable to reduce more than 70% of waste

4 Availability of technology suppliers for MGI and MBT in Europe, United States of America, and China

5 Resource recovery potential: heat, electricity, metal, biomethane (for electricity generator), and
RDF
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 INCINERATOR + PRETREATMENT
AIR POLLUTION CONTROL

- revenue EXHAUST
- cost HEAT GAS cyclone scrubber
bag
STACK
filter
- additional facility EXCHANGER
WASTE PIT FLY ASH

AIR WWTP

FLY ASH
MSW PRETREATMENT
WWTP (mixed)
bag opener
STEAM POWER PLANT
STEAM ELECTRICITY
RECYCLABLES

separator
FURNACE HOT
turbine
INERT FLUE generator
GAS WATER
MSW
EVAPORATED
(dried)
MOISTURE condenser
dryer
pump

COOLANT COOLANT
ASH
IN OUT
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 MBT-AD (ANAEROBIC DIGESTION) WtE PLANT

- revenue
- cost
- additional facility
WASTE PIT

EVAPORATED
MOISTURE
MSW PRETREATMENT digestate RDF PELLET
WWTP (mixed)
dryer pelletizer
bag opener

RECYCLABLES MSW
(organic) biogas methane ELECTRICITY
separator AD REACTOR conditioner GENSET
INERT

Plastic &
Paper RPF
shredder pelletizer

RESIDUE

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Project Profile
Assignment Recipient for Project Development Technological Option

Perumda Pembangunan Sarana Jaya East Jakarta Area South Jakarta Area

Capacity: 1700 TPD Capacity: 1500 TPD

Moving Grate Production: Production:
Concession Period Incinerator • Electricity: 18 MWh • Electricity: 16.7 MWh
(MGI) Residual: 204 TPD Residual: 180 TPD
Construction 3 Years (2022-2024)
Period Capacity: 1700 TPD Capacity: 1500 TPD
Mechanical Production: Production:
Biological • Electricity: 6.7 MWh • Electricity: 5.9 MWh
Operation Period 25 Years (2025 – 2049) • RDF fuel: 560 TPD
Treatment (MBT) • RDF fuel: 634 TPD
Residual: 432 TPD Residual: 381 TPD

Cooperation Scheme Revenue Stream

Build Operate Transfer (BOT) Moving Grate Tipping Fee

Scenario 1 Potential partners to provide land acquisition Incinerator
(MGI) Feed-in-Tariff, 20 years take-or-pay +
as their asset for the development of 5 years take-and-pay
Intermediate Treatment Facility (ITF)
Build Own Operate (BOO) Tipping Fee
Scenario 2 Potential partners to provide land with long- Mechanical
Biological Feed-in-Tariff, 20 years take-or-pay +
lease contract for the development of 5 years take-and-pay
Intermediate Treatment Facility (ITF) Treatment (MBT)
Refuse Derived Fuel (RDF) Revenue
12/23/2020
Project Financial Profile – East Jakarta Area
Moving Grate Incinerator (MGI) Mechanical Biological Treatment (MBT)
CAPEX1 CAPEX1
USD 170-220 million2 USD 130-190 million2
OPEX OPEX
USD 15.1 million per year USD 9.8 million per year

Feed-in Tariff Feed-in Tariff

USD 13.35 cents per KWh USD 13.35 cents per KWh

RDF Fuel RDF Fuel

N/A USD 21 per ton

Project IRR Project IRR

9.1% (WACC: 7.5%) 9.3% (WACC: 7.5%)
Equity IRR Equity IRR
14% 14%
DSCR DSCR
1.4 1.3
1 The CAPEX is estimated from two scenarios BOO and BOT. Based on the indicative assessment, BOO has lower amount
2 The Capex is estimated including 25% contingency cost

15
12/23/2020
Project Financial Profile – South Jakarta Area

Moving Grate Incinerator (MGI) Mechanical Biological Treatment (MBT)

CAPEX1 CAPEX1
USD 154-190 million2 USD 129-167 million2
OPEX OPEX
USD 14.0 million per year USD 9.1 million per year

Feed-in Tariff Feed-in Tariff

USD 13.35 cents per KWh USD 13.35 cents per KWh

RDF Fuel RDF Fuel

N/A USD 21 per ton

Project IRR Project IRR

9.1% (WACC: 7.5%) 9.3% (WACC: 7.5%)
Equity IRR Equity IRR
14% 14%
DSCR DSCR
1.4 1.3
1 The CAPEX is estimated from two scenarios BOO and BOT. Based on the indicative assessment, BOO has lower amount
2 The Capex is estimated including 25% contingency cost

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12/23/2020
Indicative Project Structure
Main Parties
Key Stakeholders
Supporting Entities

17
Major Risk Sharing – Risk Allocation
Risk Description Allocation
Planning Risks (Key approvals are not issued/ unreasonably delayed) SJ/ DKI
Land/ Location Risks Partner
Financial/ Financing Risk Partner
Offtake Risk SPV
Assurance on Tipping Fee (BLPS) Payment SJ/ DKI
Design and Construction Risks SPV
Waste volume and supply continuity SJ/ DKI
Waste Quality SPV
Waste Transportation SJ/ DKI
Operation Risk SPV
Social and Environmental Risk SPV
Force Majeure Risk Shared
Political Risk (Discriminatory Change in Law and Gov. Action and Inaction) Shared
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 Project Timeline

February 24 th
Request of Proposal
(RfP)
December 23th
January 7th February 12th May 26 th
Market Sounding
Aanwijzing of PQ Announcement of
June 7 th
Announcement of The Result of Selected
PQ Result Selected Partner
Partner

Dec 2020 Jan 2021 Feb 2021 March – May 2021 June 2021
December 28th January 28th March 03rd – 05th
deadline for PQ document Aanwijzing of RfP
PQ Announcement
submission

February 23rd
March 12 th – May 12 th
The Result of PQ Preparation of Proposal
(RfP)

19
Thank You