The Asian Infrastructure Investment Bank (AIIB) is providing a US$150 million loan for a satellite project aimed at improving digital connectivity in Indonesia. The non-sovereign loan is being made to Satelit Nusantara Tiga (SNT) for a multi-functional satellite that is expected to benefit 45 million people.
The satellite will provide much-needed broadband internet service to more than 149,400 unserved public service points, including schools, hospitals and local government units in some of the country's least developed regions.
Initiated by Indonesia’s Ministry of Communication and Informatics, the project is one of the top priorities of the government and aims to provide broadband internet service via satellite to government institutions at the fastest speed and at the cheapest price.
“We at SNT are delighted to have approval from AIIB’s board of directors for the financing of the project of the government of Indonesia,” says SNT president director Adi Rahman Adiwoso. “The US$150 million long-term financing provided by AIIB is a key part of the fully syndicated financing package of US$435 million. We hope to have approval from the French Export Credit Agency, Bpifrance, and Korea Development Bank to provide the balance of the syndicated financing.”
The project will be co-financed by HSBC, Santander and Korea Development Bank. Bpifrance is acting as the export credit agency for the debt provided by HSBC and Santander, and for part of the debt provided by Korea Development Bank.
“As the first satellite public-private partnership (PPP) project to be supported by AIIB, this ambitious engagement with Indonesia will offer the bank a valuable opportunity to deepen our broader understanding of the satellite and telecommunications sector in the region, including the opportunities and challenges in structuring similar satellite PPP projects,” notes DJ Pandian, AIIB vice pesident for investment operations. “The project is closely aligned with the bank’s Digital Infrastructure Sector Strategy, which allows us to draw on AIIB’s solid skill sets in developing project finance structures and PPP frameworks in the digital infrastructure sector.”