China Eximbank increases face value of preferential buyer's credit by IDR 120 billion for Section 1 of Medan Kuala Namu Toll Road Project (Linked to Record ID#61427)

Project narrative

On November 12, 2012, China Eximbank and the Ministry of Public Works and Public Housing of the Republic of Indonesia signed a $122,429,913 preferential buyer's credit (PBC) agreement [CHINA EXIMBANK PBC NO. 2012 (44) TOTAL NO. (232)] for Section 1 of the Medan Kuala Namu Toll Road Project (captured in Record ID#61427). On January 23, 2017, the face value of the PBC was increased by 120 billion IDR — from 1.22 trillion IDR to 1.34 trillion IDR — after Indonesia’s Directorate General Of Budget Financing and Risk Management (Ditjen Pengelolaan Pembiayaan dan Risiko/PPR) countersigned an amendment letter. The PBC carries the following borrowing terms: an interest rate of 3%, a 0.2% management fee, a grace period of 5 years, and a maturity period of 15 years. The proceeds of the PBC were to be used by the borrower to partially finance a $150 million EPC contract with JO CHEC-CSCEC-HK, a joint venture of China Harbor Engineering Company (CHEC), China State Construction Engineering Corporation (CSCEC), and an Indonesia state-owned company called PT.Hutama Karya (Persero). The purpose of this project was to construct Section 1 of the Medan–Kuala Namu–Tebing Tinggi Toll Road (MKTT toll road), which is an expressway that connects Medan, Kualanamu International Airport and Tebing Tinggi, in Sumatra. The expressway (toll road), which was built in two sections, is part of the Trans-Sumatra Toll Road Network and it connects the industrial area in Medan, Kualanamu International Airport, Kuala Tanjung Port, Sei Mangkei Special Economic Zone and the access to Lake Toba. Section 1 is a 17.8 km highway segment — with four overpasses, eight mainline bridges, one overline bridge, three toll stations and a highway administration office building — that runs from Medan to Kuala Namu via Perbarakan. Section 2 is a 44 km segment that runs from Perbarakan to Tebing Tingg, JO CHEC-CSCEC-HK was the contractor responsible for project implementation. The project as a whole officially commenced on November 7, 2012. Then, on September 23, 2014, a foundation laying ceremony took place for Section 1. A partial road inauguration ceremony was held on October 13, 2017. However, Section 1 was not operational and opened to traffic until August 2018. On March 11, 2018, the PBC agreement was completed, and based on Article 3.3 in the agreement, the remaining undisbursed funds (worth $22.90 million), were automatically canceled.