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ndonesia'€™s larger banks expect higher corporate loan growth this year as the government'€™s ongoing program to boost infrastructure projects is likely to trigger higher borrowing demand.

Bank Mandiri corporate banking director Royke Tumilaar said the lender was convinced that its corporate loans would grow by above 10 percent this year as it saw greater opportunities in infrastructure development.

'€œCorporate loans usually never grow by double-digits, but I'€™m optimistic about this year as more and more infrastructure projects will emerge, such as power plants, toll roads, seaports and airports,'€ Royke said in Jakarta recently.

Royke said infrastructure development would probably be the strongest engine of corporate loan growth for Mandiri this year as the sector contributed around 30 percent to 40 percent to the total corporate portfolio.

The bank had also prepared at least Rp 40 trillion (US$2.89 billion) in its pipeline for infrastructure loans over the next two or three years, Royke added.

He acknowledged that many obstacles on the ground, such as land acquisition, hindered infrastructure projects in Indonesia, but the lender was prepared for the situation as it already saw growing drawing down of investment loans in the final months of last year.

In the final months of 2015, the bank also saw rapid use of the $1 billion facility it had obtained from the China Development Bank (CDB) in September last year as it had already earmarked financing for several infrastructure projects.

Aside from infrastructure, Royke said Mandiri would continue financing potential growth sectors, such as oil and gas and palm oil as well as manufacturing, especially downstream industries, such as pharmaceuticals and smelters.

Bank Rakyat Indonesia (BRI) president director Asmawi Syam and Bank Central Asia (BCA) corporate banking director Dhalia M. Ariotedjo also expressed their optimism about corporate lending this year as a result of accelerated infrastructure development.

'€œWe expect that corporate loans will grow by 11 percent this year,'€ Asmawi said, adding that BRI would be actively involved in syndicated loans with other banks as infrastructure projects often needed huge amounts of financing.

On Dec. 17 last year, BRI led five other banks '€” Mandiri, Bank Negara Indonesia (BNI), BCA, the Indonesian Export Financing Agency (LPEI) and Sarana Multi Infrastruktur (SMI) '€” in a syndicated loan worth Rp 12 trillion to state-owned electricity firm PLN.

Meanwhile, Dhalia said BCA had already seen rising demand for corporate loans in the final months of last year, especially in sectors that needed large financing, such as telecommunications, tourism, property and construction, as well as chemicals and plastics manufacturing.

'€œThey'€™ve already drawn down their loans as they needed investment for their capital expenditure in 2015 and 2016. However, we also saw slow growth in some sectors, such as transportation, logistics, shipping, the tobacco industry and retail,'€ she said.

On the other hand, Maybank Indonesia finance director Thilagavathy Nadason said the lender would continue to grow its corporate lending but in a highly cautious mode as it foresaw drops in growth and rising bad loans in the corporate sector.

'€œWe still have concerns in some sectors, such as oil and gas as well as coal, which has seen no new loans from Maybank Indonesia for two years. We will also be cautious with the palm oil and shipping sectors,'€ she said.