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Overview

CDB provides $85 million buyer’s credit loan for ZTE Fiber Optic Network Project (Linked to Record ID#66441)

Commitments (Constant USD, 2023)$87,172,020
Commitment Year•2014Country of Activity•IndonesiaDirect Recipient Country of Incorporation•IndonesiaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 10, 2014
First repayment (originally scheduled)
Jul 9, 2017
Last repayment (originally scheduled)
Jul 8, 2021

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 Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Private Sector

  • PT MNC Kabel Mediacom (MKM)

Implementing agencies

State-owned companies

  • ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation)

Guarantors

Private Sector

  • PT Global Mediacom Tbk (MCOM)

Security / collateral agents

State-owned Banks

  • PT Bank Rakyat Indonesia (Persero) Tbk

Loan description

CDB provides $85 million buyer’s credit loan for ZTE Fiber Optic Network Project

Grace period•3 yearsGrant element•20.2665%Interest rate (t₀)•4.4772%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•7 years

Narrative

Full Description

Project narrative

On July 10, 2014, China Development Bank (CDB) and PT MNC Kabel Mediacom (MKM) — a subsidiary of PT Global Mediacom Tbk (BMTR) — signed an $85 million buyer’s credit loan agreement for the ZTE Fiber Optic Network Project. PT Bank Rakyat Indonesia Tbk served as the Security Agent for the loan and BMTR served as the Guarantor of the loan. The carried a term of 7 years, including a grace period of 3 years, with an interest rate of 6-month LIBOR plus a 4.85% margin (without Sinosure insurance), or 6-month LIBOR plus a 3.45% margin (with Sinosure insurance). It is unclear if the borrower ultimately purchased buyer’s credit insurance from Sinosure. The borrower was to use the proceeds of the loan to purchase goods and/or services from ZTE Corporation and thereby build a fiber-optic network. MKM also secured a $42.5 million buyer’s credit loan for a Huawei Fiber Optic Network Project (captured in Record ID#66441).

Staff comments

1. PT Global Mediacom Tbk (BMTR) is a private Indonesian media company. 2. No sources explicitly state that this is a buyer's credit loan. AidData assumes this is the case for the following reasons: (1) The loan is provided to a foreign borrower, (2) the loan is denominated in USD, (3) the face value of the loan is explicitly identified in multiple official sources, (4) the loan is used to procure equipment from a Chinese company, and (5) the loan may have been insured by Sinosure, which provides export credit insurance. 3. AidData has coded this transaction as a collateralized loan because PT Bank Rakyat Indonesia Tbk was selected as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower’s default under the loan. 4. For the time being, AidData has estimated the all-in interest rate (4.478%) by adding average 6-month LIBOR in July 2014 (0.328%) to the midpoint of the 3.45%-4.85% margin range (4.15%).