Narrative
Full Description
Project narrative
On September 16, 2015, China Development Bank and PT Bank Rakyat Indonesia (Persero) Tbk — an Indonesian state-owned bank — signed a $1 billion loan facility agreement to finance long-term infrastructure projects and industries in Indonesia and cross-border transactions between Indonesia and China. The loan was divided into two facilities (tranches): a $700,000,00 tranche (Tranche A) and an RMB 1,906,080,000 (Tranche B). Tranche A, which is captured in Record ID#66757, carried a 10 year maturity, 3 year grace period, and an interest rate of 6-month LIBOR (0.537%) plus a 2.85% margin (3.387%). Tranche B, which is captured in this project, carried a 10 year maturity, 3 year grace period, and an interest rate of 6-month SHIBOR (3.324% on September 16, 2015) plus 3.30% per annum (6.624%). Tranche A principal installments were to be paid on April 29, 2016 by $11,197,669.15 (full amount) up to April 30, 2018 and henceforth amounted to $42,934,110.28 (full amount) from October 30, 2018 until the maturity date. Tranche B principal installments amounted to RMB 127,072,000 (full amount) and were to be paid every six months starting on September 16, 2018 until the maturity date. The financial covenants in this loan agreement, among others, included maintaining the following financial ratios: Minimum Capital Adequacy Ratio (CAR) of 9%, Minimum Tier 1 ratio of 6%, Minimum Core Tier 1 ratio of 5%, Minimum Statutory Reserve in IDR ratio (GWM Rupiah) of 6.5%, Maximum Non-Performing Loan (NPL) ratio of 5%, Minimum Return On Assets (ROA) ratio of 0.6%. The CDB loan was fully drawn down by the borrower. Drawdowns on Tranche A were made on October 30, 2015 and November 6, 2015 and they amounted to $223,953,383 (full amount) and $476,046,617 (full amount), respectively. Drawdowns on Tranche B were made on October 30, 2015 and November 6, 2015 amounted to RMB 609,818,661 (full amount) and RMB 1,296,261,339 (full amount), respectively. According to the President of BRI, 62% of the loan proceeds supported power plant development; 25% supported toll roads; and 13% supported agribusiness.
Staff comments
1. On September 16, 2015, China Development Bank signed multiple loan agreements worth $3 billion with three of Indonesia's state owned banks: Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia in order to support infrastructure construction activities in Indonesia. Each bank secured a $1 billion loan (70% denominated in USD and 30% denominated in RMB) with a 10-year maturity and 3-year grace period. These loans disbursed in October, November, and December of 2015. Each of the following sub-projects total to $1 billion: (1) Bank Mandiri's USD tranche is captured in Record ID#66753 and the RMB tranche part is captured in Record ID#66754; (2) Bank Negara Indonesia's USD tranche is captured in Record ID#66755 and the RMB tranche is captured in Record ID#66756; and (3) Bank Rakyat's USD tranche is captured in Record ID#66757 while its RMB tranche is captured in Record ID#66758. 2. None of these CDB loans to Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia are included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.