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tate-owned toll road operator Jasa Marga has bagged Rp 2.85 trillion (US$213.19 million) of funds from a syndicated loan to finance one of its major road projects.

The company wrapped up an agreement last week with state lenders Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and regional development lender Bank Sumatera Utara (Sumut).

According to the recent agreement, funds from the loan will be used to finance Jasa Marga'€™s Medan-Kuala Namu-Tebing Tinggi toll road, which is located in Deli Serdang, North Sumatra province.

Each state bank is responsible for disbursing Rp 850 billion of the loan, while the Medan-based Bank Sumut is in charge of the remaining Rp 300 billion.

The loan is provided in the form of investment loan and will mature after 10 years. It represents around 70 percent of the total project'€™s cost, which is estimated to stand at Rp 4.07 trillion. Funds for the remainder of the cost will be generated from Jasa Marga'€™s internal finances.

The Medan-Kuala Namu-Tebing Tinggi toll road will span 61.7 kilometers.

The government will develop 17.8 kilometers of the road and a consortium of companies '€” comprising of Jasa Marga, construction firms Pembangunan Perumahan (PTPP), Waskita Karya and Hutama Karya '€” will work on the remaining 43.9 kilometers.

The toll road is expected to help spur the local economy, by connecting the Kuala Namu International Airport to other strategic areas for example.

The Public Works and Public Housing Ministry kicked off the construction of the first 17.8-kilometer section of the toll road back in September, with a completion target in June 2016. Around 30 percent of the work has already been completed.

Jasa Marga corporate secretary Mohammad Sofyan said that it had appointed a contractor to work on a 4.85-kilometer-long road, which is part of the consortium'€™s works.

'€œThe road will connect Parbarakan and Lubuk Pakam. We have already completed the tender process to appoint the contractor in June. At the moment, the contractor is working on the initial stage, which is to clear the land,'€ he told The Jakarta Post.

Outside of Sumatra, Jasa Marga is also working on a number of other toll roads in Java to support the government'€™s Trans-Java project, aimed to connect the eastern and western ends of the island by 2019.

Meanwhile, Mandiri corporate banking director Royke Tumilaar said that the bank had so far participated in the financing of seven toll roads, with total loans amounting to around Rp 8.9 trillion.

'€œThere are several more similar projects in the pipeline, which will be realized in the second half. They include the Solo-Ngawi-Kertosono toll road [connecting Central and East Java provinces],'€ he said.

Of the upcoming projects, Mandiri is looking at a minimum of Rp 10 trillion of the loan volume.

Separately, BRI institutional business director Mohammad Irfan said that it was looking to participate in other infrastructure projects as well and that the total loans channeled by BRI into infrastructure and construction sectors had reached Rp 25 trillion by the end of the first half.