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Indonesia's state-owned toll road operator Jasa Marga has closed financing to develop the Medan-Kuala Namu-Tebing Tinggi toll road PPP project (section-2).
The company has close an agreement with the state lenders Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and regional development lender Bank Sumatera Utara (Sumut) for Rp2.85 trillion (US$211.7 million) of funds to finance the road project.
The loan will mature after 10 years and represents around 70 percent of the total project investment, US$302.7 million. The remaining US$91 million is expected to be generated from Jasa Marga's internal finances. The concession contract will have a period of 40 years.
The Medan-Kuala Namu-Tebing Tinggi road, which will span 61.7 km, is part of the plan to construct the Trans-Sumatra toll road to connect the entire island of Sumatra from Aceh to Lampung. The Public Works and Public Housing Ministry will develop the 17.8 km section-1, Medan-Perbarakan-Kuala Namu, of the road and a consortium that includes Jasa Marga (55%) construction firm Pembangunan Perumahan (15%), Waskita Karya (15%) and Hutama Karya (15%) will work on the remaining 43.9 kilometers, section-2 Perbarakan-Tebing Tinggi.
The toll road is part of the ministry's support for the Master Plan for the Acceleration and Expansion of the Indonesian Economy (MP3EI) program whose mission is the improvement of Sumatra's road connectivity.