China Eximbank provides $78 million preferential buyer's credit for Section 1B of Manado-Bitung Toll Road Project (Linked to Record ID#61426)

Project narrative

In 2014, China Eximbank agreed in principle to provides a loan worth 1.1 trillion IDR for the construction of the Manado-Bitung Toll Road. Then, on June 13, 2016, China Eximbank and the Government of Indonesia signed a $78,099,963 preferential buyer's credit (PBC) agreement [China Eximbank PBC No (2016) 7 Total No (395)] for Section 1B of the Manado-Bitung Toll Road Project. The PBC carries the following borrowing terms: a 3% interest rate, a 15-year grace maturity, a 5 year grace period, a 0.2% management fee, and a 0.2% commitment fee. The proceeds of the PBC were to be used by the borrower to partially finance a $90 million commercial (EPC) contract with China State Construction Engineering Corporation (CSCEC), which was signed on October 13, 2015. As of September 2018, $24,727,417 of the PBC had been disbursed. On October 13, 2017, ICBC Indonesia agreed to contribute IDR 1000 billion to an IDR 7756 trillion syndicated loan agreement with PT Jasamarga Manado Bitung, of which IDR 500 billion was earmarked for Section 2 of Manado-Bitung Toll Road Project (captured in Record ID#61426) and IDR 500 billion was earmarked for the Pandaan-Malang Toll Road Project (captured in Record ID#69113). PT Jasamarga Manado Bitung is a special purpose vehicle and joint venture between PT Jasa Marga (Persero) Tbk (65%), PT WIKA (Persero) Tbk, and PT PP (Persero) (15%). The syndicated loan that was issued to PT Jasamarga Manado Bitung has a maturity of 15 years. Members of the syndicated included BNI, BCA, Bank Mandiri, Sarana Multi Infrastruktur (SMI), ICBC Indonesia, Bank Sulselbar, Bank Riau Kepri and Central Java Bank. The purpose of the Manado-Bitung Toll Road Project was to construct a 39 km toll road that connects two of North Sulawesi’s largest cities (Manado and Bitung) as major access roads to Bitung Special Economic Zone (KEK) and Bitung International Hub Port. Section 1A involved the construction a 7.9 km segment of the toll road from Manado to Sukur Ring Road. Section 1B involved the construction a 7 km segment of the toll road from Sukur to Air Madidi. Section 2A involved the construction an 11.5 km segment of the toll road from Airmadidi to Danowudu. Section 2B involved the construction of a 13.5 km segment of the toll road from Danowudu to Bitung. Section 1 was constructed by the Government of Indonesia. Section 2 was constructed by the private sector (PT Jasamarga Manado Bitung). CSCEC Road and Bridge Group, a subsidiary of China State Construction Engineering Corporation (CSCEC), was the contractor responsible for the implementation of Section 1B. An official project commencement ceremony took place on January 16, 2013. However, the construction of Section 1 did not begin until October 12, 2014 and the project subsequently encountered major delays due to land acquisition challenges. As of May 2017, the project had only achieved a 20% completion rate. Sections 1 and 2 of the project were ultimately completed on December 25, 2019.