China Loans Indonesia US$50 Billion for Infrastructure Projects
KATADATA ? China will provide US$50 billion or equal to IDR646.9 trillion loan to Indonesia for infrastructure development. A memorandum of understanding for the loan between the two countries was signed during the 60th anniversary of the Asian-African Conference.
The loan was provided by the China Development Bank (CDB) and the Industrial and Commercial Bank of China (ICBC). Minister of State-owned Enterprise (SOE) Rini Mariani Soemarno said that the multi-year loan will be distributed among state-owned enterprises that are working on infrastructure projects.
Most of the loan will be used by state electricity firm PLN. ?PLN will receive US$10 billion to construct transmission lines and a number of power plants,? said Rini Thursday (4/23) at the parliament building.
The remaining fund will be provided to other SOEs such as Aneka Tambang to construct a smelting plant. In addition, the loan will also be used to construct trans-Sumatra toll road, particularly Bakauheni?Terbanggi Besar section.
Furthermore, the loan will also be used to construct high speed rail, Light Rail Transit, by PT Adhi Karya (Persero) Tbk and Sorong Harbor by PT Pelindo II.
According to Rini, the loan for trans-Sumatra toll road construction will be provided in the form of debt security which will be issued by the consortium that works on the toll project. She also said that initally the debt securities will be worth US$3.5 billion.
?We?re still evaluating the SOEs between PT Waskita Karya (Persero) Tbk, PT Wijaya Karya (Persero) Tbk, or PT Jasa Marga (Persero) Tbk,? she said.
According to Rini, the loan from China will help the SOEs work on local infrastructure projects that have low commercial value. The government is currently arranging the allocation of loan to the respective SOEs.
?It?s currently being finalized. Most of the loans are still in the study phase. We expect them to be disbursed next July,? Rini said.
