Only 75 percent of the population of the East Java Province in Indonesia is served by a water supply system. East Java Provincial Government planned to develop the US$200 million Umbulan Springs Bulk Water Supply Project to supply Surabaya and the surrounding cities. The Project, to be procured as a public private partnership (PPP), involved construction of 95 kms of water transmission pipelines to connect urban centers to the remote springs. The Project envisaged local water companies buying bulk water from the provincial government, with the proceeds used to pay the PPP company. However, to make the project attractive to private investors since these local water purchasers were financially weak, it was necessary to guarantee payment obligations to the PPP company. The Indonesian Infrastructure Guarantee Fund (IIGF) is the Central Government owned guarantee provider which needed to be satisfied that payment risks would be managed.