ICBC contributes IDR 500 billion to syndicated loan for Section 2 of Manado-Bitung Toll Road Project (Linked to Project ID#46420,#69113)

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 Project ID#61426) and IDR 500 billion was earmarked for the Pandaan-Malang Toll Road Project (captured in Project 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 syndicate included BNI, BCA, Bank Mandiri, Sarana Multi Infrastruktur (SMI), ICBC Indonesia, Bank Sulselbar, Bank Riau Kepri and Central Java Bank. The lending terms are unclear. In 2014, China Exim Bank agreed in principle to fund construction of the Manado-Bitung Toll Road through a loan worth 1.1 trillion IDR. Then, on June 13, 2016, China Exim Bank 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 (captured in project #46420). 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. 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 of a 7.9 km segment of the toll road from Manado to Sukur Ring Road. Section 1B involved the construction of 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.

Additional details

1. The Chinese project title is 万鸦老--比通高速公路项目. The Indonesia project title is Jalan Tol Manado-Bitung or Proyek pembangunan jalan tol Manado-Bitung. 2. The Manado-Bitung Toll Road Project is divided into two sections, with two subsections each. Section 1 is 13.5 kilometers long and it was to be constructed by the Government of Indonesia; Section 2 is 25.5 kilometers long and it was to be constructed by the private sector. Section 1A (Manado-Sukur Ring Road) is 7.9 km long, Section 1B (Sukur-Air Madidi) is 7 km long, Section 2A (Airmadidi-Danowudu) is 11.5 km long, and Section 2B (Danowudu-Bitung) is 13.5 km long. 3. In the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, it identifies the face value of the China Eximbank loan that supported this project as $503 million. However, this estimate appears to be based on the overall cost of the Manado-Bitung Toll Road Project. AidData relies upon the precise face value ($78,099,963) of the loan [China Eximbank PBC No (2016) 7 Total No (395)] that is recorded by the borrower (the Government of Indonesia).

Number of official sources

6

Number of total sources

22