Finance Ministry SMV guarantee for KCIC seen as state budget risk buffer

Jakarta (ANTARA) - The appointment of a special mission vehicle (SMV) under the Ministry of Finance to bear the first-loss guarantee portion for PT Kereta Cepat Indonesia China (KCIC) is considered a risk buffer for the state budget (APBN). The government plans to appoint PT Penjaminan Infrastruktur Indonesia (Persero), or PII, as the Finance Ministry’s SMV to carry out this mandate, as stated in Book II of the Financial Note for the 2027 Draft State Budget (RAPBN).

Economist Yusuf Rendy Manilet of the Center of Reform on Economics (CORE) explained that PII would indeed bear claims first, so pressure on the state budget could be contained in the short term. However, given that PII’s capital originates from the state, the risk remains within the public sector. What changes is who bears the burden first and when the impact emerges, not the disappearance of overall fiscal risk.

“PT PII’s first-loss scheme should be seen as risk layering, not risk elimination,” Yusuf said. According to him, the problem with the scheme lies in its scale, where the guarantee exposure is higher than the guarantee reserve fund. This means the capacity of the first layer is relatively limited.

“If pressure on the KCJB continues and guarantee obligations increase, the initial burden will indeed fall on PII. When its capacity comes under strain, the state will ultimately still need to step in through budget support or capital injection,” he added.

He argued that the risk is growing because the Whoosh debt of around Rp116 trillion has been transferred to the SMV under the Ministry of Finance. Economically, the project’s financial pressure is moving closer to the state’s balance sheet. Assuming an interest rate of 5 to 6 percent, the interest burden ranges from Rp6 to Rp7 trillion per year.

This figure indicates that the KCJB issue is no longer merely a corporate matter but has entered the realm of fiscal risk management. “I see PII’s first-loss role as useful for reducing state budget volatility in the short term, but it does not automatically reduce the state’s fiscal risk. Therefore, what matters is not just mentioning the existence of ring fencing, but disclosing the size of the exposure, PII’s capacity to bear claims, and the scenario if the project comes under pressure,” Yusuf explained.

“Without such transparency, fiscal risk merely shifts from one balance sheet to another, rather than truly disappearing,” he said.