State-owned construction firm PT Wijaya Karya (Wika) has secured Rp 5 trillion (US$374.1 million) in syndicated loans from seven banks and state infrastructure financing firm PT Sarana Multi Infrastructure (SMI) to support its toll-road projects.

Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan’s largest lender, leads the loan syndicate with Rp 1 trillion, followed by Bank Maybank Indonesia, Bank of China Limited and SMI at Rp 900 billion each. The rest of the sum is being covered by lenders such as Bank Mizuho Indonesia, Bank ICBC Indonesia, Bank BNP Paribas Indonesia and Bank CTCB Indonesia.

The duration of the loan is three years.

Wika stated that most of the loan would be used as working capital to help it develop major infrastructure projects such as toll roads in West Java and East Kalimantan.

“The signing of the syndicated loan today is a good start for Wika and the banks providing the loan to realize the infrastructure development envisioned by the government,” Wika president director Bintang Perbowo said in an official statement on Wednesday.

Wika aims to tap into the lucrative toll-road business as President Joko “Jokowi” Widodo’s administration aims to build 1,000 kilometers of new toll roads by the end of his five-year leadership term in 2019.

Wika corporate secretary Suradi Wongso said the syndicated loan would mostly be used to develop the 99.3-km Balikpapan-Samarinda toll road in East Kalimantan, which will require an investment of around Rp 6.5 trillion. The private sector has been assigned to build around 65 km, with the government building the rest.

Wika has been desperately seeking fresh funding for the project, as it is being built under the contractor pre-financing (CPF) scheme, which stipulates that Wika first covers the construction budget before being paid back by the toll-road operator upon the project completion.

A joint venture between Wika, private firm PT Bangun Tjipta Sarana and fellow state construction firms PT Jasa Marga and PT Pembangunan Perumahan (PP) has been appointed as the operator for the Balikpapan-Samarinda toll road.

“We expect the toll-road construction to be complete by 2019 in the absence of problems regarding land procurement,” Suradi said over the phone, stating that the construction had commenced at the beginning of the year.

The construction of the 10.57-km Soreang-Pasir Koja toll road, another Wika project in West Java, meanwhile, is nearly finished with scheduled completion next month, Suradi added.

After being inaugurated as the country’s seventh president in 2014, President Jokowi vowed to focus on massive infrastructure development as an effort to spur growth. Together with the Public Works and Public Housing Ministry, state-owned construction firms have served as key institutions in translating the President’s vision into action.

In the search for new sources of funding, Suradi said Wika also plans to issue later this year bonds worth between Rp 5 trillion and Rp 10 trillion that will mature in between five and 10 years. The proceeds are expected to, among other things, partially fund the construction of the 83.9-km Serang-Panimbang toll road in Banten, also run under a CPF scheme.

“Maybe in the third quarter [we will issue the bond]. We might start it with the issuance of Rp 2 trillion worth of bonds,” Suradi said.

Wika also announced that by the third week of March, it managed to booked new contracts worth Rp 14.85 trillion, which represents 34.3 percent of its new contract target for 2017. The figure was a 146.4 percent surge from the figure during the same period last year.

“We think we can meet our full-year target [for new contracts],” Suradi said, adding that most contractors usually started slowly and only saw significant increases in new contract value approaching year-end. (ecn)

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