The South Sumatra East Cross Road Preservation Project has Reached Financial Close

22 FEBRUARY 2021

Jakarta, 22 February 2021 - On this day, the ceremonial Financial Close of the Government Cooperation Project with Business Entities (PPP) AP Jalan Lintas Timur (Jalintim) South Sumatra was carried out through the handover of a tombstone from the Director General of Financing and Risk Management of the Ministry of Finance, Luky Alfirman to the Director General Bina Marga of the Ministry of Public Works and Public Housing (PUPR), Hedy Rahadian, witnessed by the Minister of PUPR, Basuki Hadimuljono, which was held in Jakarta.

The South Sumatra Jalintim Preservation PPP project is the first PPP project in the Non-toll road sector in Indonesia and is the first PPP project to receive Sharia funding. As one of the alternative financing schemes, this PPP project is a form of Government support for the community through infrastructure projects that have a major impact on economic improvement, namely through increased connectivity between regions, especially those used as logistics, tourism, access roads to ports and airports, as well as savings in Vehicle Operating Costs (BOK) and the value of travel time.

PUPR Minister Basuki Hadimuljono said that infrastructure development financing with the PPP scheme has advantages over the APBN. "The benefits for the private sector are definitely more attractive because there is certainty of return (investment) plus the benefits of an AP (availability payment). While the benefits of the government are many projects that supervise, if the APBN supervises only PUPR, so that administrative and technical order is created to serve the public better, "said Minister Basuki at the Financial Close of the South Sumatra Jalintim PPP PPP Project and Submission of the Riau Jalintim PPP PPP auction winning letter. , at the Auditorium of the Ministry of PUPR, Monday (22/2/2021).

"This is a very good achievement because the Financial Close stage is achieved in a relatively fast time, which is about 6 months. Of course this shows the quality of preparation, structure and good project transactions, so that it can give confidence for banks to provide financing, "said Minister Basuki.

Furthermore, Minister Basuki said that the Sumatra Jalintim preservation was a pilot project for a non-toll PPP infrastructure financing scheme. Furthermore, PPP duplication or replacement of 38 Callender Hamilton bridges on Java Island will also be implemented and the construction of the Jayapura-Wamena Road around 50 km in Papua Province.

Previously on August 3, 2020, a Cooperation, Guarantee and Regress agreement was signed on the South Sumatra Jalintim Project by the Ministry of PUPR cq the Directorate General of Highways as the Person in Charge for Cooperation Projects (PJPK), PT Jalintim Adhi Abipraya as the Implementing Business Entity / BUP (a consortium of PT Adhi Karya and Brantas Abripraya) and PT PII as the Government Guarantee provider for the PPP project.

The East Sumatra Highway Preservation Activity Project in South Sumatra Province (“Sumsel Jalintim Project”) as the first PPP project in the non-toll road sector has reached the stage of signing a guarantee and regression agreement on August 3, 2020. This project has received various supports from the Ministry of Finance, namely the Project Development Facility (PDF) assigned to PT Penjaminan Infrastruktur Indonesia (Persero) / "PT PII" and infrastructure guarantee from PT PII. Then on January 29, 2021, a confirmation letter was issued on the fulfillment of the requirements for disbursement of financing facilities (Financial Close) of Rp. 644,760,000,000, - from a syndicate of Indonesian Sharia Bank, PT Sarana Multi Infrastruktur (Persero), and PT Bank Panin Dubai.

Director General of Financing and Risk Management (Dirjen PPR) of the Ministry of Finance, Luky Alfirman in his remarks said that the Jalintim project was initiated in 2018. The Ministry of Finance has begun to design and innovate through the PPP AP scheme. After going through a long journey from planning, preparation and final transactions in August 2020, the South Sumatra Jalintim Project was able to appoint PT Jalintim Adhi Abipraya as BUP and today PT Adhi Karya (Persero) as the BUP of the Riau Jalintim project.

"We, the Ministry of Finance, are also proud and appreciative to all agencies involved for the achievement of the Financial Close of the South Sumatra Jalintim project on January 30, 2021, which at the same time makes that date the completion of the PDF process from the Ministry of Finance. It is even more special to see Bank Syariah Indonesia become the lead financier with Panin Dubai Syariah and PT SMI for the PPP project of AP Jalintim South Sumatra. This is one of the milestones that shows that the PPR scheme contract can be accepted as an underliying of Sharia-based funding, ”continued the PPR Director General.

"The Ministry of Finance is very supportive of the implementation of these two projects by providing PDF facilities and providing guarantee support assigned to PT PII. In several previous sectors the Ministry of Finance usually contributed to the provision of joint guarantees with PT PII (Co-Guarantee), but in both projects this was an extraordinary progress because the guarantee support was carried out by PT PII itself so that it became a milestone. investor confidence in providing infrastructure project guarantees with the PPP scheme and PDF facilities provided by the Ministry of Finance through PT PII which focuses more on aspects of the quality of public services by paying attention to aspects of the Sustainability Development Goals (SGDs) so that the two projects have met these quality standards ", concluded the Director General. PPR in ending his speech at the event.

The President Director of PT PII, M. Wahid Sutopo at the event stated that this achievement was a very good thing where the Ministry of Finance through the Ministry of Finance's SMV, namely PT PII played a role in project preparation facilities and transaction assistance / Project Development Facility (PDF) which was the first PDF facility. at the PUPR Ministry and underwriting so that this project can reach the Financial Close stage in a relatively fast time, approximately 6 months. This shows that the quality of project preparation, structure and transactions is good so that it can provide confidence for banks to provide financing in a short period of time.

"With the signing of this project, PT PII has provided guarantees for 26 PPP projects. This is of course inseparable from the excellent cooperation and support, especially from the leadership and the Bank Syndication team, the Ministry of Finance, the Ministry of PUPR as PJPK, and Business Entities. President Director of Bank Syariah Indonesia, Hery Gunadi, feels proud to be able to contribute in supporting government programs related to infrastructure development, namely the Preservation of the East Sumatra Cross Road in South Sumatra Province along ± 29.87 km along with bridges and facilities for the Motor Vehicle Weighing Implementation Unit (UPPKB).

"Alhamdulillah, Bank Syariah Indonesia has become a part of history in providing the first PPP facility using Sharia transactions, where the contract used is Ijarah Munjukiyah bi Tamlik, which is a benefit lease transaction for an object with a transfer of ownership at the end of the lease period," said Hery Gunardi.

In this project, Bank Syariah Indonesia was appointed as the Mandated Lead Arranger (MLA) in the syndicated financing of PT Jalintim Adhi Abipraya. The total syndicated financing ceiling to be disbursed in this project is IDR 644 billion with a financing period of 10 years.

Apart from being the Mandated Lead Arranger (MLA) in the syndicated financing of PT Jalintim Adhi Abipraya with PT Sarana Multi Infrastruktur and PT Bank Panin Dubai Syariah, Bank Syariah Indonesia also acts as a Facility Agent, Escrow Agent, and PT Jalintim Adhi Abipraya syndicated financing guarantee agent.

Deputy President Director 1 of Bank Syariah Indonesia, Ngatari, added that today's syndicated financing collaboration is an initial step for Indonesian Sharia Bank in making Indonesia's Sharia Economy stronger. "As a result of the merger of three Islamic banks belonging to Himbara, Bank Syariah Indonesia is a sharia bank with the 7th largest total assets in Indonesia, valued at IDR 240 trillion," said Ngatari. In terms of network, Bank Syariah Indonesia is supported by more than 1,300 office networks, around 2,400 ATM networks, and supported by more than 20,000 employees spread across the archipelago.

For information, the form of cooperation in the Jalintim South Sumatra PPP project is DBOFMT (Design-Build-Finance-Operate-Maintain-Transfer) with a return on investment through the Availability Payment (AP) scheme. The project with an estimated investment cost of Rp 916.4 billion (this investment cost consists of construction costs and interest during construction) has a concession period of 15 years consisting of 3 years of construction and 12 years of service.

The main scope of this PPP Project is to carry out the preservation of the Sumatra East Cross National Road in South Sumatra along 29.87 km and 14 bridges. The preserved road sections include Jalan Srijaya Raya (6.3 km), Jalan Mayjen Yusuf Singadekane (5.2 km), Jalan Letjen H. alamsyah Ratu Perwiranegara (3.15 km), Jalan Soekarno - Hatta (8.32 km) , Access to Alang-alang Lebar Terminal (4 km) and Jalan Sultan Mahmud Badarudin II (2.9 km). The Jalintim section is also equipped with two Motor Vehicle Weighing Implementation Units (UPPKB).

In addition, on today's activity there was also a Letter of Award for the Riau Jalintim AP PPP Project which was submitted by the Minister of PUPR to PT Adhi Karya (Persero) who was accompanied by the Director General of PPR and the Director General of Highways. The PPP AP Jalintim Riau project is targeted to sign the PPP agreement in Q2 2021.