CDB provides $41 million loan for China-Indonesia Economic and Trade Cooperation Zone Project

Project narrative

In 2007, China’s Ministry of Commerce approved an application from China Guangxi State Farms Group Co. Ltd. to establish a China-Indonesia Economic and Trade Cooperation Zone. Then, on July 7, 2009, China Development Bank (CDB) and China Guangxi State Farms Group Co. Ltd. signed a $41 million (approximately RMB 280 million) loan agreement for the China-Indonesia Economic and Trade Cooperation Zone Project. The borrowing terms of the loan are unknown. The purpose of the project was to construct an overseas economic and trade cooperation zone — called the China-Indonesia Economic and Trade Cooperation Zone or Kawasan Industri Terpadu Indonesia China (KITIC) — that integrates integrate industrial production, warehousing, logistics and trade in an industrial area within the town of Cikarang an Bekasi Regency. KITIC, which is a joint venture of China Guangxi State Farms Group Co. Ltd. and Indonesia’s PT Sentrabumi Palapa Utama, is located 60 km from Jakarta’s Soekarno-Hatta International Airport and 50 km from Tanjung Priok Port (one of the country’s busiest ports). The project was implemented in two phases. Covering 205 hectares, Phase 1 mainly involved the construction of industrial park infrastructure to support sectors such as automobile and motorcycle parts, food processing, warehousing and logistics, packaging and building materials. Phase 2 involved the construction of a 250-hectare comprehensive smart zone to support technological innovation and environmental protection. A groundbreaking ceremony took place in November 2010 and shortly thereafter access road construction began. By 2013, the project’s first phase was complete. The first company to begin operating in KITIC came on board in 2011. KITIC is now home to 47 companies from China, Indonesia, Malaysia, Japan, New Zealand, Finland and the United States, with total investment exceeding $1 billion. These companies include China XD Group, Hipad Intelligent Technology Ltd. under China Aerospace Science and Industry Corporation (CASIC), Nantong Kangqiao Axunge Co., Ltd., France-based Schlumberger (a Fortune Global 500 company) and New Zealand-based Fonterra (the world’s largest dairy exporter). In August 2016, KITIC passed inspections and assessments by the Ministry of Commerce and Ministry of Finance.