Skip to content
AidData logo

Overview

ZTE provides $100 million supplier's credit -- via deferred payment facility -- to Telkom Indonesia for acquisition of telecommunications equipment

Commitments (Constant USD, 2023)$138,731,777
Commitment Year•2009Country of Activity•IndonesiaDirect Recipient Country of Incorporation•IndonesiaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 20, 2009
First repayment (originally scheduled)
Jul 1, 2013
Last repayment (originally scheduled)
Dec 31, 2015

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 companies

  • ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation)

Receiving agencies

State-owned companies

  • PT Telkom Indonesia (Persero) Tbk

Implementing agencies

State-owned companies

  • ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation)

Loan description

ZTE provides $100 million supplier's credit -- via deferred payment facility -- to Telkom Indonesia for acquisition of telecommunications equipment

Grace period•4.5 yearsGrant element•32.0665%Interest rate (t₀)•2.30875%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•7 years

Narrative

Full Description

Project narrative

On August 20, 2009, PT Telkom Indonesia (Persero) Tbk (Telkom Indonesia) — a state-owned telecommunications company in Indonesia — signed a $100 million deferred payment (vendor financing) facility with ZTE Corporation to facilitate the acquisition of telecommunications equipment. The purpose of the purchased equipment was to facilitate the implementation a telecommunications project with ZTE Corporation. The facility carried an interest rate of 6-month LIBOR plus a 1.5% margin and it was scheduled for semi-annual repayment between February 11, 2014 and June 15, 2016. The facility was unsecured (i.e. not collateralized). The borrower was to use the proceeds from the facility to finance 85% of the total cost of its project (commercial contract) with ZTE Corporation. While there is evidence that telecommunications equipment was procured from ZTE Corporation, precise project implementation start and end dates are unknown.

Staff comments

1. PT Telkom Indonesia (Persero) Tbk, also simply known as Telkom and Telkom Indonesia, is an Indonesian multinational telecommunications conglomerate. Telkom is listed on the Indonesia Stock Exchange and has a secondary listing on the New York Stock Exchange. The government of Indonesia owns over half of Telkom's shares outstanding. 2. The all-in interest rate that applies to the facility (2.343%) was estimated by taking the average 6-month LIBOR rate in August 2009 (0.843%) and adding a 1.5% margin.