Infrastructure Financing through Islamic
Finance in the Islamic Countries
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The third set of laws and regulations relate to specific, sector-wise regulations that were also
instituted to create a conducive environment for infrastructure delivery. The laws and
regulations specific to different sectors are listed in Table 4.1.6. Other than the regulations
listed in the table, there are additional laws/regulations that govern the sectors. For example,
Presidential Decree No. 4/2016 on electricity projects identifies the number of facilities
provided for state-owned enterprise PT PLN to accelerate the provision of electricity. Some of
the steps include strengthening the balance sheet of PLN and the provision of equity and
lending by the government, tax holiday, etc.
Table 4.1. 6: Sector Specific Laws and Regulations
Sector Relevant Regulation
Airports  Law No. 1 of 2009 on Air Transportation
 Government Regulation No. 40/2012 on Airport Construction and Environment
Preservation
Ports  Law No. 17 of 2008 on Water Transportation
 Government Regulation No. 61 of 2009 on Port Affairs
 Government Regulation No. 20 of 2010 Water Transportation
Railways  Law No. 23 of 2007 on Railway Affairs
 Government Regulation No. 56 of 2009 on Implementation of Railway Affairs
 Government Regulation No. 72 of 2009 on Rail Traffic and Transportation
Roads Law No. 22 of 2009 on Traffic and Road Transportation
Electricity
(Power Plant,
Transmission,
Distribution)
 Law No. 30 of 2009 on Electricity
 Law 27 of 2003 on Geothermal
 Government Regulation No. 59 of 2007 on Geothermal Business Activities
 Government Regulation No. 3 of 2005 on Amendment to Government Regulation No.
10 of 1989 on the Provision and Utilisation of Electricity
 Law No. 30 of 2009 on Electricity
 Government Regulation No. 14 of 2012 on Electricity Business Provision
 Government Regulation No.62 of 2012 on Electricity Support Business
 Ministry of Industry Regulation No. 54/M-Ind/PER/3/2012 on the Guidelines for the
Use of Domestic Products in the Construction of Electricity Infrastructure
Water Treatment,
Transmission and
Distribution
Law No. 7 of 2004 on Water Resources
Government Regulation No. 16 of 2005 on Development of Drinking Water Supply
Source:
regulatory-framework
After the enactment of various acts and presidential decrees, the relevant ministries take the
necessary steps to implement them. For example, the central government has imposed 511
project assignments on the Ministry of State Owned Enterprises (SOE) for them to pursue and
implement infrastructure development.
While PPP was regulated by Presidential Regulation No. 67/2005, Indonesia has numerous
laws, acts and regulations that govern other aspects of PPP. Furthermore, some of the
procedures and requirements are regulated by government regulations on the management of
state and regional assets and regional cooperation. Different layers of laws and regulations
sometimes overlap and can, at times, be conflicting (ADB undated: 2). To have clarity in law
related to PPP, there is a need for a comprehensive law that provides a clear legal framework
to private investors willing to invest in infrastructure projects. In this regard, Public Private
Partnership Presidential Regulation no 38/2015 revised the PPP regulations of 2005 to
encourage more PPP investments in the infrastructure sector.