Developing a toll road financing model with a hybrid of deep discount project bonds and land leases in Indonesia

Lukas Sihombing, Yusuf Latief, Ayomi D. Rarasati, Andreas Wibowo

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


There are three main problems with the existing toll road financing model in Indonesia. First, there are limitations, and the fund disbursements take a rather long time in the state budget fund allocations for land acquisition. Second, there is inability to have long-term financing. Third, there are banking limitations in the borrowing tenor period. Therefore, it is significant to develop a new financial model that can be implemented in developing toll roads in Indonesia. There are seven financing models that have been identified as being successfully implemented and effective in the world. To determine which model is most effective to be implemented in Indonesia, a literature study and in-depth interviews need to be conducted. These paper results revealed two appropriate financing models that can be implemented, which are the deep discount bonds, and the land lease financing model. Next, to obtain the critical success factor (CSF) of this hybrid of models, this paper uses a Delphi method. The three top ratings above for the hybrid CSF model are land status that is leased “clear and clean”, fair risk allocations and risk divisions, government involvement in guaranteeing risks that become the responsibility of the government. The next step is to build a deep discount project bond and land lease hybrid financing model, as well as develop an institution and hybrid model policy. For the hybrid financing model institution, it creates optimization of land lease, and a sustainable financial system for a toll road investing, secures physical state land, administration and legally, and improves the management, added value, financial system, and investments that are conducive for public-private partnership (PPP). The policy needed in order that this hybrid financing model can be applied is suggested in a government regulation or law about the DDPB and land lease hybrid financing model.

Original languageEnglish
Pages (from-to)1310-1323
Number of pages14
JournalInternational Journal of Civil Engineering and Technology
Issue number6
Publication statusPublished - Jun 2018


  • Deep discount project bonds
  • Financing model
  • Land lease
  • Toll road infrastructure investments


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