Indonesia has ambitious infrastructure goals but lacks the financing to get them off the ground. (Antara Photo/Wahyu Putro A.)

Chinese Banks as Standby Buyers for Indonesian SOEs Rp 50t Bond Offering


MAY 08, 2015

Jakarta. China Development Bank and Industrial and Commercial Bank of China have expressed their commitment to buy up to Rp 50 trillion ($3.8 billion) bonds to be sold by Indonesia’s infrastructure state-owned enterprises, a minister said on Thursday.

Among the SOEs are Wijaya Karya, Waskita Karya, Hutama Karya, all of which are working on construction of Trans-Sumatra toll road and electricity transmission network.

The State Owned Enterprises Ministry and Bahana Securities are still assessing the term and plan for issuing the bonds, whether the companies would sell their bonds individually or work togrther and act as a pool, said Minister Rini Soemarno.

The companies need fresh funding in order to complete projects on time, Rini said.

“The government wants Trans-Sumatra to be completed by the time Indonesia hosts Asian Games 2018,” she said.

President Joko Widodo broke ground for Bakauheni-Terbanggi section in Lampung on April 30, to kick start the Trans-Sumatra toll road project.

Rini Soemarno announced at the end of the Asian-African Conference last month that Chinese banks are providing $50 billion for the construction of new infrastructure in Indonesia.