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Govt to finalize HSR loan negotiation with around 3.6 percent interest rate
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A Whoosh high-speed railway (HSR) train is seen on Oct. 2, 2023, during the inauguration at Halim station in Jakarta. (AFP/Bay Ismoyo)
I
ndonesia will soon finalize negotiating loan interest rates to finance the cost overrun of the Whoosh high-speed railway (HSR), with the figure expected to remain high despite efforts to secure cheaper funding costs.
Deputy State-Owned Enterprises (SOEs) Minister Kartika Wirjoatmodjo said that state-owned railway company PT KAI would take the additional loan, and that it would inject the funds to PT KCIC, the Sino-Indonesian consortium responsible for the project.
"We are going to release the term sheet, as it depends on the guarantee [from the state]. This should happen this week. The interest rate is around 3.6 to 3.7 percent," Kartika said on Tuesday, as quoted from Tempo.
"In fact, the first risk will fall on KAI, and KAI is healthy [financially]. So, the government doesn't give guarantees directly to KCIC, but to KAI," Kartika added.
Read also: More work ahead, analysts say on day of HSR inauguration
The figure is slightly lower than the initial figure that Indonesia had tried to slash since April.
That month, Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said the government was seeking to lower the rate to 2 percent from the 4 percent proposed by the China Development Bank (CDB) as main financier of the project.
