Klungkung Investor Briefing Pack 2025

A Policy‑Led Whitepaper for Capital Deployment
Prepared for Santi Capital · August 2025

Klungkung is entering an execution‑heavy phase of development driven by a clear policy spine and measurable targets. The district’s 2025 agenda prioritises equitable service infrastructure, environmental quality, disaster risk reduction, governance reform, and inclusive growth across tourism, MSMEs, agriculture and fisheries. For investors, this creates a predictable lane to structure projects that directly lift the government’s official Key Performance Indicators (KPIs) while tapping blended finance (PPP + CSR + concessional loans). The catalytic Pusat Kebudayaan Bali (PKB) at Gunaksa — a 334‑hectare cultural and creative economy hub — is a regional game‑changer whose downstream demand justifies enabling utilities and mobility upgrades on both the mainland and the Nusa Penida–Lembongan corridor.

Investor proposition: Design projects to move the official scoreboard (infrastructure coverage and inequality indices, environmental and water quality, disaster risk, governance/innovation and village competitiveness metrics). Align nomenclature with RKPD program/activity codes and time submissions to the budget cycle (RKPD → KUA/PPAS → RKA → RAPBD; with in‑year “Perubahan”).

1. Policy Architecture & Why It Reduces Risk

Long‑term anchor (RPJPD 2005–2025) provides the 20‑year vision and the stage‑4 transformation mandate (2020–2025), ensuring infrastructure, tourism/creative economy, MSMEs, human development and governance reforms are not political fads but structural commitments. RPD 2024–2026 bridges to the new long‑term cycle, locking a three‑year lane for investors. RKPD 2025 translates strategy into a one‑year, budget‑linked plan with explicit KPIs and program tables. The documents interlock with national/provincial plans and guide budget instruments (KUA–PPAS, RKA, RAPBD). For capital providers, this continuity cuts policy and execution risk, and provides a standard template for performance‑based contracts.

2. Macro & Investment Outlook (2024–2026 Trajectory)

• Growth normalisation: The medium‑term plan targets a steady recovery of PDRB growth through 2026, supported by tourism quality upgrade, MSME strengthening and enabling infrastructure.

• Capital inflows: The district sets explicit annual benchmarks for domestic (PMDN) and foreign direct investment (PMA). These escalating targets signal a pro‑investment stance and enable outcome‑based facilitation for priority projects.

• Household demand & services: Rising household consumption per capita and a deliberate push for higher‑value accommodation, F&B and creative industries underpin non‑tradable growth and tax buoyancy.

Implication: Project structuring should anticipate a gradual improvement in fiscal space and regulatory throughput, with a bias toward sectors that crowd‑in private capital and expand the taxable base.

3. Fiscal Posture & Budget Mechanics (How Projects Get Funded)

Klungkung’s development appetite exceeds its own‑source capacity, producing persistent financing gaps and year‑end balances (SILPA). The planning documents therefore institutionalise alternative financing: (i) PPP/KPS across multiple schemes (BOT/BTO and variants); (ii) CSR and PKBL for catalytic capex and O&M, proven through municipal waste pilots; (iii) inter‑regional cooperation and (iv) grant/loan blending. For investors this means there is policy cover to negotiate availability‑payment or hybrid revenue‑risk structures, and to formalise CSR participation as de‑risking capital.

Budget pathway: Proposals that mirror RKPD program/activity nomenclature and include official indicators can be inserted into KUA–PPAS → RKA → RAPBD; mid‑year reprioritisations are possible via KUPA–PPAS Perubahan when revenue outturns or performance shift. Include the OPD lead, location codes, and the indicator movement (baseline → target) directly in the concept note.

4. The 2025 KPI Scoreboard (Design‑To Metrics)

Use: Make one or more of these the payment triggers and impact covenants in PPPs and operating contracts. Provide quarterly M&V against baselines from 2018–2023 tables where available.

5. Sector Deep Dives & Investable Theses

5.1 Tourism & Creative Economy (Quality over Volume)

Thesis: Transition from volume‑driven to value‑driven tourism supports resilient ARR, higher yield per visitor and diversified local supply chains. The PKB Gunaksa hub concentrates demand for cultural programming, events, and creative industries, while the Nusa Penida–Lembongan corridor drives accommodation and experience‑based growth.

Entry points:

• Eco‑luxury hospitality and branded residences with local content (IKM/MSME) agreements.

• Cultural venues, galleries, maker spaces and market halls that leverage PKB’s footfall.

• Destination operations stack: safety and mobility systems, integrated ticketing, night‑time economy activation, and digital visitor services.

Design notes: Incorporate biodiversity buffers, coastal‑risk setbacks, and water‑neutral operations; link O&M fees to environmental and satisfaction indicators.

5.2 Infrastructure & Utilities for Service Quality

Thesis: Equitable service coverage is the political and fiscal priority. Upgrading roads/bridges/jetty facilities, drainage and flood management, water and sanitation, and distributed energy efficiency in public facilities delivers measurable scorecard lifts and justifies availability‑payment PPPs.

Entry points:

• Mainland service corridors + Nusa Penida last‑mile access improvements.

• Non‑sewered sanitation, greywater reuse, modular MBR for dense/tourism nodes; smart leakage control for PDAM.

• Street‑lighting and public‑building retrofit programs with M&V to lift SAKIP and Reform Index.

5.3 Waste & Circularity

Thesis: Tourism and urbanisation pressures require a circular model. The district recognises CSR‑supported pilots (e.g., TOSS) as viable; scaling modular waste processing and hotel‑consortium utilities unlocks environmental and water‑quality gains.

Entry points:

• Organics + recyclables hubs with performance‑based O&M; concession fees linked to IKLH/water outcomes.

• Island resort consortia for shared waste and water assets with transparent tariffs and ESG reporting.

5.4 Digital Governance & Service Delivery

Thesis: Raising Reform and Innovation indices demands digital permitting, inspections, and data transparency. For investors, govtech reduces transaction costs and accelerates time‑to‑revenue.

Entry points:

• Risk‑based licensing platforms, e‑inspections, grievance redress and spatial transparency tools.

• Citizen‑facing service apps and procurement analytics that increase UMKM participation and P3DN uptake.

5.5 Agri‑Marine & MSME Value Chains

Thesis: Diversification into higher‑value agro‑processing and fisheries complements tourism while stabilising rural incomes.

Entry points:

• Cold‑chain and processing for fisheries and horticulture; traceability for export and premium domestic markets.

• MSME clusters (crafts, culinary, wellness) integrated into tourism distribution and PKB events calendar.

6. Flagship Catalyst: Pusat Kebudayaan Bali (PKB) — Gunaksa

Profile: 334‑hectare cultural/creative district on non‑productive ex‑lahar land at the lower Tukad Unda. Budgeted at approx. IDR 2.5 trillion with a target delivery around 2025, the project is designed as an integrated, smart, and green destination delivering education, conservation, recreation, and creative‑economy benefits.

Investment logic:

• Demand anchor for hospitality, F&B, retail and creative production.

• Justifies enabling infrastructure (access roads, drainage, utilities) and de‑risks private brownfield/greenfield projects nearby.

• Platform for local content (IKM/MSME) and skills programs tied to events and venue operations.

Actionables: Secure parcels adjacent to PKB’s primary access; structure PPPs for mobility, utilities and venue management with revenue‑ or availability‑payment hybrids.

7. Location, Hazard & Resilience Considerations

Klungkung exhibits moderate multi‑hazard exposure (landslide‑prone hilly areas on the mainland; coastal abrasion and extreme waves in parts of Nusa Penida and the south coast). Investment designs should internalise geotechnical due diligence, coastal setbacks, slope stabilisation, and evacuation/access planning. Tie resilience KPIs to the official Disaster Risk Index and water quality outcomes.

8. Financing Structures & Model Clauses

PPP menus: BOT/BTO/BOO, affermage/lease, O&M with CAPEX recovery, and availability‑payment hybrids where user‑fee recovery is uncertain.

CSR/PKBL: Treat as catalytic equity or O&M support, ring‑fenced by MoUs and third‑party M&V. Use CSR to derisk early‑stage pilots (e.g., modular waste hubs) that later migrate into PPP concessions.

Blended/ODA: Seek concessional loans or grants to reduce WACC for water, sanitation, waste and resilience assets.

Template clauses:

• Performance annex: Lists the government KPI(s) the project moves; defines baselines and quarterly reporting.

• Adjustment & step‑in: Mechanisms for tariff/AP adjustment tied to macro indicators; clear lender step‑in rights.

• Local content: Minimum UMKM/P3DN participation, supplier development and fair‑work commitments.

• ESG & biodiversity: Compliance with Indonesian and international safeguards; biodiversity offset hierarchy; public dashboards.

9. Implementation Roadmap (12–18 Months)

1. 0–60 days: Site scans around PKB and tourism corridors; ESG red‑flag screen; early OPD engagement (Bappeda, DPMPTSP, sector OPDs).

2. 60–120 days: Pre‑feasibility (techno‑economic + siting + permitting); community and MSME mapping; financing structure selection.

3. 120–210 days: Draft PPP/O&M contracts with KPI‑linked payments; procurement packaging; CSR/grant co‑funding agreements.

4. 210–300 days: Align with KUA–PPAS; secure insertion into RKA/RAPBD or prepare for Perubahan track.

5. 300–360 days: Commercial/financial close; mobilisation; launch M&V cadence and disclosure dashboards.

10. Monitoring, Verification & Disclosure (M&V)

Establish a single “impact register” per project mapping to the government scoreboard. Use third‑party audits for environmental and social safeguards, and publish quarterly progress summaries. For utilities and governance tech, automate data capture (SCADA/IoT, e‑permit logs) to streamline reporting and reduce disputes over payment triggers.

11. Risk Register & Mitigations

12. Opportunity Shortlists (Illustrative)

• PKB Halo Assets: Cultural venue + market hall + maker spaces; O&M concession with MSME revenue‑share; KPIs = MSME income, visitor dwell time.

• Island Utilities: Modular water + waste hubs for Nusa Penida resorts; availability‑payment with resort consortium; KPIs = water quality, IKLH.

• Mobility & Access: Jetty safety and capacity upgrades + integrated ticketing; KPIs = service coverage, user satisfaction.

• Digital Permitting & Inspections: SaaS for licensing/inspections with analytics; KPIs = Reform Index, SAKIP, Innovation Index.

• Agri‑Processing: Cold‑chain and premium processing for fisheries/horticulture; KPIs = MSME sales, domestic product uptake.

12.1 Market Context & Demand Modeling (Bali → Klungkung)

Visitor baselines and elasticity. Bali’s 2024 rebound consolidates the island’s position as a regional demand engine. Building from the official provincial series, arrivals and occupancy trends justify a value‑over‑volume strategy. For Klungkung, the relevant conversion funnel is airport → mainland cultural circuit → island corridor (Nusa Penida–Lembongan). A conservative elasticity model assumes:

• A 10% increase in province‑wide international arrivals yields ~6–8% growth in the Nusa Penida corridor, capped by ferry capacity and last‑mile constraints.

• Every 1pp improvement in star‑hotel occupancy is associated with ~0.3–0.5pp lift in F&B and tours per visitor, with higher multipliers where night‑time economy and cultural programming are available.

• Levy compliance (tourist tax) is a signaling tool for “quality tourism” and can be tied to ESG projects to widen visitor willingness‑to‑pay (WTP).

Corridor micro‑economics. The PKB Gunaksa hub acts as a demand aggregator on the mainland. A 5‑event/month cultural calendar at 60–75% venue capacity implies 120–180k incremental annual attendances (unique + repeat), supporting clustered F&B/retail and boutique lodging within a 15–20‑minute drive. On the islands, capacity upgrades at jetties and route scheduling unlock dwell‑time shifts from day‑trips to overnights; each 0.3 night increase in average length of stay (ALOS) lifts corridor RevPAR by 8–12% under current rate bands.

12.2 Capital Stack Architecture & Instruments (Indonesia PPP, Guarantees, Blends)

Standardized stacks.

• Availability‑payment PPP: Capex 60–80% senior debt (tenor 10–15y), 10–20% mezz/concessional (SDG‑linked), 10–20% equity; MoF/IIGF guarantee on government payment obligations; tariff‑free for users → strong fit for water, sanitation, waste and public venue O&M.

• Hybrid revenue PPP: User fees + minimum revenue guarantee; suitable for marinas, parking, ticketing; escrow‑based waterfall with quarterly true‑up.

• CSR‑catalysed pilots: 10–20% CSR for proof‑of‑concept (e.g., modular waste hubs), migrates to PPP once KPIs are met; lock M&V and reporting early.

Risk allocation canon. Align to Indonesia’s PPP rulebook: (i) government retains regulatory and certain force‑majeure risks; (ii) demand risk targeted only where pricing power or captive flows exist; (iii) construction risk sits with the private party with capped delay LDs; (iv) foreign exchange risk mitigated by local debt and indexation formulas in availability payments.

Guarantees & de‑risking. Utilize national guarantee and blended‑finance infrastructures to compress WACC: infrastructure guarantees for government obligations, viability gap‑style capital support where tariff sufficiency is weak, blended concessional tranches (climate/water) to lengthen tenor.

12.3 Regulatory & Permitting Playbook (What Speeds Time‑to‑Revenue)

• Risk‑based licensing (OSS‑RBA): Map each asset class to risk tiers; hotels, restaurants, tour operations, waste and water utilities trigger distinct NIB and perizinan berusaha requirements. Pre‑arrange environmental and building approvals with standardised templates; integrate with e‑inspection protocols to lift Reform & SAKIP scores.

• Procurement readiness: Draft functional specs around outputs/outcomes (e.g., kg waste diverted, m³ water reused, minutes of average wait time at jetties). Pre‑publish evaluation criteria and ESG clauses to boost competition and UMKM/P3DN participation.

• Land & adat interfaces: Secure adat endorsements (pararem/perarem desa) and social licence MOUs; include benefit‑sharing for community enterprises; ring‑fence grievance redress.

12.4 Environmental & Social Baselines (Design‑to‑Target Engineering)

• IKLH & Water Index: Set site‑specific baselines and model improvements attributable to the asset (e.g., biological oxygen demand reduction from modular MBR; coastal run‑off attenuation via bioswales and permeable paving).

• Disaster Risk Index: For mainland slopes and island coasts, embed geotech (slope stability factors), coastal setbacks, and evacuation egress in the concept design. Make resilience outcomes auditable (e.g., % of assets above design flood level; mean‑time‑to‑recovery).

• Biodiversity & culture: Establish no‑go zones, buffers to temples and sacred sites, and nesting/reef protection plans. Program cultural calendars jointly with desa adat to shape visitor flow and elevate spend per visit.

12.5 Scenario Planning (2025–2028)

Assumptions: Bali international arrivals compound at 6% (base), 2% (bear), 9% (bull); levy compliance improves 10–20pp via airline/API integration; accommodation ADR grows 3–5% real; ferry capacity expansions phase in by mid‑2026.

• Bear: Slower global growth; APBD consolidation reduces capex; focus on availability‑payment utilities and CSR‑backed pilots; target IRR 11–13% in IDR with downside‑protection covenants.

• Base: Balanced arrivals and capex; full KPI‑linked PPPs in water/waste + jetty access; PKB event cadence at plan; target IRR 13–15%.

• Bull: Strong arrivals + levy compliance; premium hospitality and creative venues outperform; scope for user‑fee PPPs in parking/marinas; target IRR 15–18%.

12.6 Unit Economics & Sensitivities (Illustrative)

• Modular waste hub (50–100 tpd): Capex IDR 30–60bn; Opex IDR 6–10bn/yr; revenues from availability fee + recyclables; breakeven at ~85–90% contracted volume; KPI: tonnes diverted; IKLH contribution.

• Jetty upgrade + ops: Capex IDR 40–80bn per jetty; Opex IDR 4–8bn/yr; revenue mix: embarkation fees + minimum‑revenue guarantee + advertising; KPI: average wait time, safety incidents, satisfaction index.

• District MBR (500–1,000 m³/day): Capex IDR 20–40bn; Opex IDR 3–5bn/yr; AP with indexing; KPI: treated m³, effluent quality, % reuse.

12.7 Governance & Transparency (Turning KPIs into Payment Triggers)

• Contract annexes: Map each payment to a measurable government KPI (coverage %, IKLH, water index, risk index, SAKIP/Reform). Publish quarterly dashboards and open raw M&V data (where feasible) to crowd‑in trust and concessional capital.

• Innovation & UMKM: Structure supplier development (mentored UMKM slots), require domestic content thresholds (P3DN), and track local jobs and spend as part of the impact register.

12.8 Engagement Roadmap & Deal Origination

• Phase 1 (0–90 days): Site reconnaissance; data room collation (permits, baselines, demand); pre‑feasibility; OPD workshops to align nomenclature and indicators.

• Phase 2 (90–180 days): Term sheets and draft PPP/O&M; procurement packaging; CSR/grant co‑funding commitments; adat/community MOUs.

• Phase 3 (180–360 days): KUA–PPAS alignment; RKA insertion or Perubahan track; financial close; mobilisation; first quarterly M&V publication.

12.9 What “Quality Tourism” Means in Practice (A Local Compact)

• Visitor levy → visible ESG: Ring‑fence a share of levy proceeds to district‑level water/waste/resilience projects; co‑brand assets with LoveBali and disclose metrics in public dashboards.

• Experience density: Curate an all‑season PKB program (music, dance, culinary, craft fairs) and coordinate with island operators for bundled tickets and late‑evening mobility to extend dwell time.

• Code of conduct & place care: Embed behavioural guidelines in ticketing/OTA flows; fund ranger/guide programs via a per‑ticket earmark to improve service and conservation outcomes.

13. Conclusion

Klungkung’s plans are unusually clear about what will be measured and how it is funded. This clarity is investable. The disciplined move for Santi Capital is to concentrate on projects that can demonstrably lift the official scoreboard while building long‑run cash‑flow moats in hospitality, utilities, circularity and govtech. The PKB Gunaksa hub is the anchor to time around; the budget cycle is the clock to design to; KPI‑linked payments are the language to contract in.