Narrative
Full Description
Project narrative
In July 2022, China Eximbank and the Government of Indonesia signed a $259 million preferential buyer’s credit (PBC) agreement for Section 3 of the Serang-Panimbang Toll Road Project. The estimated borrowing terms of the loan (PBC) include a 13.2-year maturity, a 5.1-year grace period, and a 2.9% interest rate. The borrower is expected to use the proceeds of the loan to partially finance a commercial contract with China Road and Bridge Corporation (CRBC). The purpose of the project was to construct a 33 km section (‘Section 3’) of the Serang-Panimbang Toll Road that runs from Cileles to Panimbang. Upon completion, the toll road is expected to shorten travel time from Jakarta to the SEZ Tanjung Lesung from 5 hours to 2 hours, and boost the economic development of Banten Province. The full toll road includes the following sections: Serang to Rangkasbitung (Section 1, 26.5 km), Rangkasbitung to Cileles (Section 2, 24.17 km), and Cileles to Panimbang (Section 3, 33 km). The first section became operational in December 2021. CRBC is the EPC contractor responsible for project implementation. However, some sources indicate that a consortium of PT Sino Road and Bridge, PT Adhi Karya, and PT Wijaya Karya were responsible for project implementation. Reportedly, construction on Section 3 was originally intended to begin in August 2021 and reach completion within 24 months (August 2023). However, the project’s groundbreaking ceremony ultimately took place on August 8, 2022. Project completion is now expected in 2024.
Staff comments
1. Some sources (see https://www.pwc.com/id/en/media-centre/infrastructure-news/december-2018/serang-_-panimbang-toll-road--govt-waiting-for-chinas-loan.html) indicate the sections were to be divided as follows: Serang to Rangkas Bitung (26.50 km), Rangkas Bitung to Bojong (33 km), and Bojong to Panimbang (24.40 km). However, the majority of sources indicate the sections are as follows: Serang to Rangkasbitung (26.5 km), Rangkasbitung to Cileles (24.17 km), and Cileles to Panimbang (33 km). 2. Some sources (see, for example, http://sispro.co.id/id/news/pembangunan-tol-serang-panimbang-seksi-iii-mendapat-pinjaman-4-5-triliun-dari-china-101965.htm) indicate that PT Sino Road and Bridge, PT Adhi Karya, and PT Wijaya Karya are the project contractors. Chinese official sources which were (a) published at later dates and (a) are more official only list CRBC, however. As such, CRBC has been coded as the only implementing agency, but this issue warrants further investigation. 3. The Chinese project title is 西冷—巴宁邦收费公路第三标段项目. The Indonesian project title is Tol Serang Panimbang Seksi III. 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Indonesia was 13.2 years in 2022. AidData estimates the maturity of the China Eximbank loan that supported Section 3 of the Serang-Panimbang Toll Road Project by using this figure. See https://www.dropbox.com/scl/fi/stbsondlzk05t09z7xf7z/Indonesia-s-official-sector-PRC-borrowings-and-borrowing-terms-IDS-December-2024.xlsx?rlkey=9ndf1pbfb7b5le5j55po2i69x&dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Indonesia was 5.1 years in 2022. AidData estimates the grace period of the China Eximbank loan that supported Section 3 of the Serang-Panimbang Toll Road Project by using this figure. See https://www.dropbox.com/scl/fi/stbsondlzk05t09z7xf7z/Indonesia-s-official-sector-PRC-borrowings-and-borrowing-terms-IDS-December-2024.xlsx?rlkey=9ndf1pbfb7b5le5j55po2i69x&dl=0 6. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Indonesia was 2.9% in 2022. AidData estimates the interest rate of the China Eximbank loan that supported Section 3 of the Serang-Panimbang Toll Road Project by using this figure. See https://www.dropbox.com/scl/fi/stbsondlzk05t09z7xf7z/Indonesia-s-official-sector-PRC-borrowings-and-borrowing-terms-IDS-December-2024.xlsx?rlkey=9ndf1pbfb7b5le5j55po2i69x&dl=0