New Regulation on the Selection of Business Entities for Infrastructure PPP Projects
The Government of Indonesia, through the Public Procurement Agency (Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah or “LKPP”), has issued LKPP Regulation No. 1 of 2026 on the Procedures for the Selection of Business Entities for Infrastructure Public-Private Partnership (PPP) Projects (the “Regulation”).
The Regulation sets out the institutional framework and procedures for the selection of business entities to implement infrastructure projects under a PPP scheme. It identifies the key procurement actors, comprising the Government Contracting Agency, PPP Node, Procurement Committee, prospective participants, and Procurement Process Advisor.
Under the Regulation, the selection of a business entity may be conducted through tender or direct appointment, subject to the fulfillment of certain requirements. Direct appointment may be used, among others, where the PPP project falls within specified circumstances, including: (i) an expansion of an existing project; (ii) the use of new technology that is exclusively owned by a particular entity; (iii) where an entity controls all or a majority of the land required for the project; or (iv) where only one entity passes the prequalification process.
For solicited PPP projects, the Regulation provides for several tender mechanisms, namely one-stage tender, two-stage tender, and a combination of prequalification and one-stage tender.
The Regulation also introduces a specific procurement framework for unsolicited PPP projects, covering the evaluation of the project initiator’s qualifications, issuance of approval for the project initiator, procurement preparation, and implementation of the procurement process. The selection of a business entity for an unsolicited project may be conducted through one-stage tender, a combination of prequalification and one-stage tender, or a Swiss Challenge.
Overall, the Regulation provides greater procedural clarity on the selection of private-sector partners for both solicited and unsolicited PPP projects and sets out alternative procurement mechanisms that may be applied depending on the characteristics and circumstances of the relevant project.