Three SOE Banks Mull China Loan

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  • TEMPO.CO, Jakarta - Three government-owned banks, PT Bank Mandiri (Persero) Tbk (BMRI), PT Bank Negara Indonesia (Persero) Tbk (BBNI) and PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), are mulling loan facility from China Development Bank (CDB) worth US$3 billion or around Rp40 trillion.  State-Owned Enterprise (SOE) Minister Rini Soemarno said the assessment was carried out in line with the financing target of the national infrastructure development.

    “The assessment with CDB is still being discussed.  There has not been any signing, but CDB’s commitment is quite good,” Rini said in Jakarta on Tuesday.

    According to Rini, in the discussion, each SOE banks will explore loan application of US$1 billion.  She ensured the facility is purely to boost SOE bank credit loans, particularly in the infrastructure sector.  The loan from CDB is part of the memorandum of understanding (MoU) signing between the SOE Ministry and the National Development Reformation Commission (NDRC), during President Joko Widodo’s visit to China last February.

    In the MoU, a loan commitment was obtained from two Chinese financial institution, the CDB and the Industrial and Commercial Bank of China Limited (ICBC), each of US$20 billion or US$40 billion from total of the two institutions.  “CDB and ICBC is ready to grant a standby loan for insfrastructure projects in collaboration between the SOE Indonesia and SOE China,” said Rini.

    PT Bank Mandiri CEO Budi Gunadi Sadikin revealed that the company is prioritizing on infrastructure financing.

    The government is allocating infrastructure fund of Rp1.176 quadrillion for 2015-19.  This year, the government is budgeting Rp290.3 trillion. Previously, SOE construction PT Adhi Karya (Persero) Tbk (ADHI) is also exploring loan with CDB worth Rp7 trillion for a Light Rapid Transit (LRT).

    PT Sarana Multi Insfrastructure (SMI) also will add a multilateral loan of US$100 million or around Rp1.3 trillion next year.  The additional fund will be distributed to the company’s subsidiary, PT Indonesia Infrastructure Finance (IIF).  PT SMI CEP Emma Sri Martini said the loan is planned to be obtained from the World Bank and Asian Development Bank, that is facilitated and forwarded to SMI by the government. “The loan will be disbursed in the second half of this year,” said Emma.

    This year, SMI will not add multilateral funds because the company currently has a Rp20 trillion capital, which consists of the Government Investment Center’s additional asset transfer fund of Rp18 trillion and State Capital Participation of Rp2 trillion.