China Eximbank contributes to $150 million syndicated loan for Advanced Smart Metering Infrastructure PPP Project

Project narrative

On June 9, 2023, the State Grid Corporation of China (SGCC) signed a $150 million syndicated loan agreement with China Eximbank, Bank of China, and DBS Bank. Each bank contributed $50 million. The loan carries a 5-year maturity. Its other borrowing terms of the loan are unknown. However, it is known that the loan is backed by a Sinosure credit insurance policy. It is also known that the borrower was expected to use the proceeds of the loan to finance an advanced metering infrastructure managed services procurement contract between the Indonesian state-owned utility Perusahaan Listrik Negara (PLN) and SGCC, which was signed in December 2022. The public-private partnership (PPP) project was undertaken according to a Build-Own-Operate-Transfer (BOOT) model with a 10-year concession period. Under the concession (BOOT) agreement, SGCC was responsible for the project financing, system design, smart meter terminal and master station system development, site survey, procurement, installation, testing, and commissioning. PLN was responsible for paying a fixed amount to SGCC for its services. The syndicated loan was collateralized against the fixed amount due from PLN and hard assets. The purpose of the project was the installation of up to 1.2 million smart meters in eight provinces (North Sumatra, Banten, Greater Jakarta, West Java, Central Java, East Java, Bali, and Southeast and West Sulawesi) of Indonesia. The smart meters were expected to increase the accuracy of electricity bills on recording meters in each transaction. Construction began in January 2023. Within six months, 14,000 smart meters had been put into operation. By October 2023, 93.54% of the 1.2 million meters had been installed. The entire metering system was put into operation on January 9, 2024.