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Overview

Bank of China (Hong Kong) contributes to $700 million syndicated loan to PT SMI for refinancing, general corporate, and capex purposes in September 2023

Commitments (Constant USD, 2023)$25,000,000
Commitment Year•2023Country of Activity•IndonesiaDirect Recipient Country of Incorporation•IndonesiaOverseas Jurisdiction•Hong Kong (China)Sector•Banking And Financial ServicesFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 31, 2023
Last repayment (originally scheduled)
Aug 30, 2027

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (Hong Kong) Limited (BOCHK)

Cofinancing agencies

Private Sector

  • CTBC Bank (formerly Chinatrust Commercial Bank)
  • DBS Bank Ltd.
  • Mizuho Bank, Ltd.
  • MUFG Bank, Ltd. (Formerly Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU))
  • United Overseas Bank Limited (UOB)

State-owned Commercial Banks

  • Agricultural Bank of China (ABC)
  • China Construction Bank Corporation (CCB)

Receiving agencies

State-owned companies

  • PT Sarana Multi Infrastruktur (Persero) (PT SMI)

Loan description

BOC, China Construction Bank, ABC contribute to $700 million syndicated loan with PT SMI in Indonesia 2023

Interest type•Variable Interest RateMaturity•4 years

Narrative

Full Description

Project narrative

On August 31, 2023, PT Sarana Multi Infrastruktur (Persero) [PT SMI] — an Indonesia state-owned enterprise — signed a $700 million sustainability-linked, syndicated term loan facility agreement with a group of banks for (a) refinancing purposes, and, if there are remaining funds, for (b) general corporate purposes, and (c) to fulfill new financing needs primarily for sustainable infrastructure projects in Indonesia, which was expected to further strengthen the asset liability management of the company (borrowing institution). The facility included a 3-year tranche (Tranche A) and a 5-year tranche (Tranche B). Both tranches carry an interest rates of SOFR plus unspecified margins. The sustainability-linked facility features concrete performance targets that are in line with PT SMI's commitment to Environmental Social Governance (ESG). The key performance indicators (KPIs) include (1) growing the sustainability financing portfolio and; (2) increasingly the number of employees undertaking ESG-related trainings. The transaction was supported by several Mandated Lead Arrangers & Bookrunners (MLABs) — namely, Bank of China (Hong Kong), CTBC Bank Co., Ltd., DBS Bank, Mizuho Bank, MUFG Bank Ltd, and United Overseas Bank (UOB). UOB also acted as the MLABs' Coordinator and the overall Sustainability Coordinator for the transaction. PT SMI engaged Environmental Resources Management (ERM) as the second party opinion provider, to provide a review on the KPI and Sustainability Performance Targets (SPT) for the transaction. Chinese bank contributions to the syndicated loan included a $50 million contribution from Bank of China (Hong Kong) Limited and the Jakarta Branch of Bank of China (Hong Kong) Limited, a $16 million contribution from the Singapore Branch of Agricultural Bank of China Limited, Bank of China, and an $18 million contribution from China Construction Bank.

Staff comments

1. The estimated maturity of the loan (4 years) is based on the average maturities of Tranches A and B. 2. The individual contribution from each branch of BOCHK to the syndicated loan is unspecified. For the time being, AidData assumes that each branch provided an equal share of BOCHK's $50 million contribution to the loan ($25 million each).