The issuance of Presidential Regulation No. 79 of 2024 on Funding for the Provision of Infrastructure through the Management of Area Value Increase ("PR 79/2024") introduces an innovative approach to infrastructure development. By leveraging the concept of land value capture ("LVC"), PR 79/2024 provides a sustainable funding mechanism to support future projects. It ensures that the economic benefits derived from increased land value are equitably distributed among the government, private sector, and local communities. This underscores the government’s commitment to promoting inclusive growth and securing efficient infrastructure financing. Moreover, the successful implementation of LVC globally, in countries such as Hong Kong and Japan, highlights its potential. In Indonesia, two notable pilot projects have been proposed to utilize the LVC mechanism, namely: (i) the Semarang Harbour Toll Road, and (ii) the Batam-Bintan Bridge. Find out more our insights about this topic in our Legal Brief publication.
Comments