The Government of Indonesia hasexpressed interest in the World Bank's help indetermining the best options for financing mechanisms tosupport public-private partnership (PPP) development. TheGovernment would like to explore wholesale-type approachesvia the establishment of a guarantee fund with financialsupport from the Bank and other multilateral institutions.This note discusses how the guarantee fund and theBank's support will best work, presentation of options,how this concept relates to the current work on riskmanagement strategies, and relevant internationalexperience. After describing the background behindIndonesia s need for a guarantee fund, the report goes overpossible steps in establishing a fund, and compares othergovernmentsexperiences. Next, the concept of agovernment-sponsored guarantee fund is defined, along withits risks and benefits. The World Bank can provide advisoryand financial support in the establishment of the guaranteefund. The last section describes the next steps to be takenby the government of Indonesia.