ICBC Indonesia contributes IDR 500 billion to IDR 4.179 trillion syndicated loan for Pandaan-Malang Toll Road Project (Linked to Record ID#61426)

Project narrative

On October 13, 2017, PT Jasamarga Pandaan Malang (JPM) — a special purpose vehicle and joint venture of 3 Indonesian state-owned enterprises: PT Jasa Marga (Persero) Tbk (60% ownership stake), PT PP (Persero) Tbk (35% ownership stake), and PT SMI (5.0% ownership stake) — signed an IDR 4.179 trillion syndicated loan agreement with Bank BCA, Bank Mandiri, BNI, ICBC Indonesia, Indonesia Eximbank, and Bank Jateng. ICBC Indonesia contributed IDR 500 billion to the syndicated loan. The loan has a 15-year maturity and it bears interest at an average of 3-month time deposit rate published by syndicated banks plus a margin of 4.5% during construction time (and 4.25% from the date of toll operation period). Its final maturity date is October 2032. The loan is secured by (collateralized with) compensation from JPM’s bridge financing provided to the Government of Indonesia for land acquisition, toll receivables and other revenues, concession to the Pandaan-Malang toll road, insurance, claims and bank guarantees and land funding, escrow, construction, collection, debt service, debt service reserve, operational and excess cash accounts. The purpose of the project was to design, finance, construct, and operate a 38.48 km Pandaan-Malang Toll Road, which connects Malang city with Pandaan of Pasuruan Regency. It is divided into 5 sections. Section I: Pandaan-Purwodadi is 15.47 km. Section II: Purwodadi-Lawang 8.05 km. Section III: Lawang-Singosari 7.10 km. Section IV: Singosari-Pakis 4.75 km. Section V: Pakis-Malang 3.11 km. The road was designed to facilitate industrial transportation to Malang and Batu city and reduce the travel time of Pandaan-Pasuruan-Malang to less than an hour. The Government of Indonesia granted JPM a 35-year toll road concession in 2016. Construction began in early 2017. By the end of 2017, Section I had achieved a 23.89% (construction) completion rate, Section II had achieved a 7.98% completion rate, Section III had achieved a 5.92% completion rate, Section IV had achieved a 0.14% completion rate, and Section V had achieved a 0.43% completion rate. Sections I, II, and III have been operational since May 13, 2019. Section 4 has been operational since November 2019. Section 5 began operations on April 7, 2020. The project experienced stalling in March 2019 when it uncovered a historical site in Sekarpuro subdistrict, Malang regency in East Java. It is unclear whether JPM began a new route after consulting the Cultural Heritage Preservation Center (BPCB) who studied the materials onsite.