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tate-owned Hutama Karya expects the government to secure Rp 11.3 trillion (US$858 million) from the China-led Asian Infrastructure Investment Bank (AIIB) to fund its trans-Sumatra toll road project.

The funding will be used especially for the 130-kilometer Pekanbaru-Dumai central section of the megaproject, said Hutama Karya president director I Gusti Ngurah Putra. Total investment for the section is Rp 16 trillion, the remaining of which may be funded by state-owned infrastructure financing firm Sarana Multi Infrastructure (SMI).

“We need to have combined financing measures, because there is a hefty amount of capital needed. Meanwhile, we also have to keep the project going and finish this by 2019,” Putra told The Jakarta Post recently.

The toll road megaproject is listed among President Joko “Jokowi” Widodo’s strategic projects, spanning 2,600 km with Rp 331.69 trillion estimated costs to improve connectivity in the region despite lack of commercial appeal.

The state budget can only provide a fraction of the funding required for the project, while the remaining will be sourced from a combination of bank loans, bonds, loans from multilateral agencies or from infrastructure financing firms.

This year, Hutama Karya is considering issuing bonds worth Rp 6.5 trillion in the third quarter to fund the 140 km Bakauheni-Terbanggi Besar section, which requires Rp 16.7 trillion as it sees its state capital injection (PMN) cut by a third to Rp 2 trillion.

This has made it more difficult for Hutama Karya, which was assigned by a presidential regulation to construct the trans-Sumatra toll road project, to raise funding.

Soon, the government, the eighth-biggest donor within the AIIB, will travel to China to convey its intentions on the trans-Sumatra toll road financing plan, as agreed during the latest meeting with the Office of the Coordinating Economic Minister.

If the AIIB loans are not approved and cannot be disbursed as soon as possible, Hutama Karya can issue medium term notes to meet the financing needs, said Committee of Infrastructure Priorities Development Acceleration (KPPIP) team chairman Wahyu Utomo.

“Efforts are needed to expedite the loan process. The President has also pushed for the construction of the Pekanbaru-Dumai section to commence soon,” he added.

Hutama Karya is prioritizing finishing four sections by 2019 at the latest, namely Pekanbaru-Dumai, Medan-Binjai, Palembang-Indralaya and Bakauheni-Terbanggi Besar.

Public Works and Public Housing Minister Basuki Hadimuljono has previously stated that the project is a “tough one” to finish compared to the 498.24-km trans-Java, due to the funding difficulty and lengthy land procurement process.

The Palembang-Indralaya and Medan-Binjai sections are 15 percent done, although land procurement has reached more than 70 percent, respectively, according to the latest data from the Toll Road Regulatory Agency (BPJT).

The other two sections, Pekanbaru-Dumai and Bakauheni-Terbanggi Besar, fared worse with construction progress below 5 percent and land procurement progress under 25 percent.

The toll road megaproject is part of President Jokowi’s infrastructure push to ease bottlenecks in Southeast Asia’s largest economy and stoke growth. It is also aimed at increasing connectivity for the movement of goods and people around the archipelago.