JAKARTA (TheInsiderStories) - Industrial and Commercial Bank of China (ICBC) has agreed to provide a loan commitment with total value pf US$4 billion for three Indonesian state-owned enterprises (SOE), namely PT Garuda Indonesia Tbk (IDX: GIIA), PT Semen Indonesia Tbk (IDX: SMGR) and PT Aneka Tambang Tbk (IDX: ANTM).
ICBC is committed to lend Garuda Indonesia US$1.5 billion, Aneka Tambang US$1.5 billion and Semen Indonesia US$1 billion. According to Deputy Minister for SOEs Fajar Harry Sampurno, the funds will be used for several projects such as Antam’s ferronickel project, cement plant project of Semen Indonesia in Aceh, Kupang, Myanmar, Sri Langka and debt refinancing also for aircraft purchase.
“This is the first loan commitment from ICBC to Indonesian company. After signing the MoU, the fourth parties will discuss more projects to be funded,” he told reporters after the signing of the MoU between ICBC, Garuda Indonesia, Semen Indonesia and Aneka Tambang at Garuda office in Jakarta.
ICBC’s director Thomas Arifin added that the loan commitment is part of continuation synergy among the three SOEs that have been created between Indonesia and China. While, Finance Director of SMGR Darmawan Junaidi stated that this cooperation is expected to help the company to find a breakthrough in order to remain a major player related to the development of the cement industry and infrastructure projects in Indonesia.
Previously, three state-owned banks — PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Rakyat Indonesia Tbk (IDX: BBRI) and PT Bank Negara Indonesia Tbk (IDX: BBNI), — have secured loans worth a total of $3 billion from the China Development Bank (CDB), which will be used to finance infrastructure projects in the country.
The state owned banks will get loans worth $1 billion respectively with a tenor of 10 years. Around 30 percent of the loans would be received in Renminbi (RMB). The term of the loan is in accordance with the infrastructure financing which requires long-term funding.
These loans are the first phase of the CDB’s commitments to lend $30 billion to Indonesian state owned companies and in line with the government program that would boost the infrastructure sector. The loans are expected to further spur economic growth in Indonesia.
According to the State Enterprises Minister Rini Soemarno, the loans will be used for developing infrastructure projects in Indonesia, which have become the priority program of President Joko Widodo.
The loans are a follow-up of the MoU signed in February this year by the Indonesian Ministry of State Enterprises and China’s National Development Reformation Commission (NDRC).
In the MoU, a loan commitment was obtained from two Chinese financial institutions, the CDB and the Industrial and ICBC, which agreed to provide $20 billion each or a total of $40 billion.
“CDB and ICBC are ready to provide a standby loan for infrastructure projects in collaboration between the SOE Indonesia and SOE of China,” said Rini Soemarno.
She added, the state-own construction firm PT Adhi Karya Tbk (IDX: ADHI) is also exploring loans from CDB worth Rp7 trillion for a Light Rapid Transit (LRT). (*)