JAKARTA (TheInsiderStories) - PT Len Telekomunikasi Indonesia has secured syndicated loan from PT Infrastructure Fiannce (Persero), PT Bank Negara Indonesia (Persero) Tbk (BNI) and PT Sarana Multi Infrastruktur (Persero) worth Rp975 billion that will be used to finance the development of Palapa Ring Tengah project.
The loan syndication was signed on Monday (Aug. 29) in Jakarta by President Director of IIF Arisudono Soerono, Division Head for SOE and Governmetn Institutions of BNI Henry Panjaitan, Director for Finance and Investmetn of SMI Edwinsyah Ruzad as well as President Director of PT LEN Telekomuikasi Indonesia Raden Wahyu Pantja Gelora, witnessed by Minister for Communicaiton and Information Rudiantara and Director for Corporate Business of BNI Herry Sidharta.
Raden Wahyu said the loan enables the company to carry on the project, with a target to start commercial operation in March 2018.
Palapa Ring project is part of the government’s Masterplan of National Broadband 2014-2019 and part of the efforts to develop telecommunication backbone across the country.
The Information and Communication Ministry has awarded LEN Telekomunikasi Indonesia to develop broadband network in 17 cities and regencies in five provinces in central part of Indonesia, namely Kalimantan, Sulawesi and North Maluku. The developer will lay down broadband cable along 1,676 kilometers.
LEN Telekomunikasi Indonesia is 51 percent owned by PT Len Industri (Persero), 39 percent by PT Teknologi Riset Global Investama, 5 percentby PT Multi Kontrol Nusantara and 5 percent by PT Bina Nusantara Perkasa.
Arisudono said the loan is a third such cooperation under the so-called cooperation among state owned institutions being embarked by IIF and shows commitment of the state owned entities to fund infrastructure projects.
Herry Sidharta added BNI takes part in the syndicated loan, showing concrete support of the bank to fund infrastructure projects, including the broadband project. BNI targets to provide Rp20 trillion to fund variuos infrastructure projects this year. As of end july, the bank has provide Rp14 trillion for infrastructure projects — toll roads, power, transportation, telecommunication and oil-and-gas, up 24 percent from the same period last year.
So far this year, IIF has signed a number of infrastructure projects amounting to Rp7.7 trillion. Of which, Rp4.4 trillion has been extended including the construction of LNG plant in West Papua, 5 airport projects and fuel terminal.
Palapa Ring Project
Palapa Ring project is one of Indonesia’s priority infrastructure projects in the 2016-2019 period. The project involves an undersea fiber-optic cable network that stretches across 13,000 kilometers and an onshore network of nearly 22,000 kilometers. The project aims to provide fast broadband Internet to Indonesians in both the urban and rural areas.
The Palapa Ring project is one of the many infrastructure projects in Indonesia that had been delayed. The project has been initiated in 1998 and has not been completed. The Joko Widodo government has revived the project and considered as one of his government’s priority.
The ambitious Palapa Ring project is divided in three sections (the West, Central and East sections). The project is scheduled to be completed by 2018.
According to the Association of Internet Service Providers in Indonesia (APJII), Indonesia’s Internet penetration rate now stands at 38 percent, means that some 100 million Indonesians are connected to the Internet and majority of them, in particular in eastern and central part of Indonesia have not been connected with internet. (*)