State financial firm, PT Sarana Multi Infrastruktur (SMI) is exploring a syndicated loans up to US$500 million to support infrastructure financing activities - Photo by the Company

JAKARTA (TheInsiderStories) – State financial firm, PT Sarana Multi Infrastruktur (SMI) is exploring a syndicated loans up to US$500 million to support infrastructure financing activities, said the director as quoted by Investor. The party has mandated the arrangers and book-runners for the program namely Bank of China, CTBC Bank, MUFG Bank, Standard Chartered Bank, and UOB.

According to Mohammad Ghozie Indra Dalel, the loan will have a tenor of three years. He estimates that the loan process can be completed in July. The funds will channeling to provincial government and other infrastructure projects.

Last year, the SMI has provided funding to 24 local governments worth of Rp4.61 trillion for the construction of regional hospitals and roads to bridges. Of this amount as much as Rp4 trillion has been withdrawn by the regional government.

“Lending to the regions is to support the regional government in accelerating the provision and improvement of the quality of services of the community,” said president director of SMI, Edwin Syahruzad said in Jan. 24.

Some regional infrastructure has financed by the agency such as general hospital in Konawe in Southeast Sulawesi with a total capacity of 219 beds, road construction along 523 kilometers and bridge construction along 983 meters.

“Regional financing is expected to be one of the instruments to accelerate development in addition to the National Budget in the provision and improvement of public service facilities,” said Syahruzad.

The company also issued 73 offering letters to 54 regional governments with total amounts of Rp12 trillion. He said, SMI also provides support in the distribution of Project Development Facilities in the form of feasibility studies of detailed engineering design to environmental studies.

Last May, the financial firm and state-owned power producer, PT Perusahaan Listrik Negara (PLN) also had signed a memorandum of understanding to develop new and renewable energy. The value of the cooperation is estimated at $4.29 billion.

The cooperation is carried out to build 1,403 megawatts (MW) or 40 percent of the total addition of renewable power plants by PLN. The electricity producer has planned to add an renewable power generation capacity of 16,765 gigawatt during 2019 – 2028.

“This cooperation is one of the concrete steps of to realize the government’ target achieve energy mix of 23 percent by 2025,” finance director of PLN, Sinthya Roesly said on May 16.

The majority of SMI-funded power plants will be powered by water or hydropower with an energy capacity of around 904 MW. With the cooperation also allows PLN to build a geothermal power plant with a capacity of 360 MW, a wind or wind power plant with a capacity of 100 MW, a mini hydro power plant with a capacity of 38.2 MW, and a power plant solar power with a capacity of 1.3 MW mostly in eastern Indonesia.

In detail, the Maluku Maluku region is 111 MW, Nusa Tenggara is 25 MW, Kalimantan is 496 MW, and Sulawesi is 146 MW. As a pilot project, there are three projects planned to be executed in 2020.

SMI is a special mission vehicles under the ministry of finance that has a financing business for infrastructure projects. Until the end of 2019, the agency was recorded have assets of Rp75.82 trillion, with liabilities of Rp35.96 trillion and equity of Rp36.85 trillion.

The company also listed as a bond issuer, which in the near future will distribute cash dividends of Rp500 billion, equivalent to 29 percent of the company’ net profit in 2019.

US$1: Rp14,000

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