JAKARTA (TheInsiderStories) – PT Indonesia Infrastructure Finance (IIF) provided Cash Deficiency Support Rp600 million (US$$42.55 million) to unit of PT Waskita Toll Road (WTR), said the official on Wednesday (10/23). This facility will be used to support the development of Pemalang – Batang toll road in Central Java.
The facility has a period of 18.5 years since the signing date or five years from the repayment date and have a grace period 13.5 years. During the grace period, the debtor bears interest at 3 percent in cash and a deferred interest at the Deposit Insurance Corporation rate plus 4.25 percent. The interest will be paid after the end of the grace period.
According to IIF’ president director Reynaldi Hermansjah, the provision of these facilities is in line with the company’ mandate as a catalyst for infrastructure financing in Indonesia. Through this facility e issuance of new CDS products that allows toll road operators to meet the cash requirements for new toll road sections that are operating.
The Pemalang – Batang toll road crosses three regencies in Central Java and is part of the Trans Java Line, that connect the Pejagan – Pemalang Toll Road and the Batang – Semarang Toll Road. The operation of the toll road is expected to ease the traffic burden on the north coast of Java, speed up the logistics supply chain, and support the development of Central Java tourism.
Earlier, The Asian Development Bank (ADB) approved a $100 million financial intermediary loan to Indonesia, to help catalyze private sector investments in infrastructure projects.
“The loan will help mobilize private sector investments to develop and finance much-needed infrastructure projects,” said ADB Country Director for Indonesia Winfried F. Wicklein in an official statement on Tuesday.
Indonesia’ infrastructure financing gap remains significant, with annual investment needs estimated to be more than $70 billion, said the Bank. Accelerating infrastructure development is a development priority of the Indonesian government.
Under the Leveraging Private Infrastructure Investment Project, the government will on lend the ADB loan proceeds to IIF and PT Sarana Multi Infrastruktur. Both companies are important institutions in Indonesia’ infrastructure financing landscape, that provide project finance, advisory services, guarantees, and project development support to infrastructure projects.
With ADB’ assistance, IIF will lend at commercial terms to infrastructure projects adhering to the institution’ and ADB’ standards and guidelines. The loan will support projects in health, renewable energy, telecommunication and transportation sectors.
“ADB’ assistance is anticipated to leverage a multiple of the loan amount in the form of additional private sector investments in important infrastructure projects and in doing so help deliver value for money to the government,” said ADB Country Economist Mr. Yurendra Basnett.
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