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RI’s Eximbank increases trade-finance for six SOEs
Indonesia Eximbank has allocated a larger trade-financing facility for state-owned enterprises (SOEs), to Rp 2 trillion (US$149
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ndonesia Eximbank has allocated a larger trade-financing facility for state-owned enterprises (SOEs), to Rp 2 trillion (US$149.89 million) this year, more than five times last year’s allocation of Rp 372.51 billion.
The state-owned lender will provide the facility for six strategic SOEs namely PT Industri Kereta Api (INKA), PT Len Industri, PT Pal Indonesia, PT Pindad, PT Dirgantara Indonesia (PTDI) and PT Barata. Amid sluggish economic growth in developed countries, Indonesia is eyeing inroads into alternative markets such as Africa, the Middle East, and Latin America.
“As we will finance more SOEs in 2017, we are increasing the allocation to Rp 2 trillion this year,” Indonesia Eximbank president director Susiwijono Moegiarso said during a press conference in Jakarta recently.
The six strategic SOEs are working on their export contracts, with some of them having reached manufacturing phase, while others are still in negotiation with their potential buyers.
Train builder INKA, for instance, is currently negotiating with Egypt and Mozambique to export more rail cars after sealing a repeat order from Bangladesh. The firm delivered 150 cars in 2016, prompting a new order for an additional 250 cars with a contract value of Rp 1.4 trillion.
To support INKA, electronic equipment maker Len Industri has sealed a contract from Bangladesh to build a train-signaling system. In October 2016, the company already inked a memorandum of understanding (MoU) with Bangladeshi Biswas Construction to work on a signaling system between Joydebpur and Ishurdi.
Meanwhile, weapons producer Pindad in February inked a MoU with two United Arab Emirates-based companies, namely Caracal International LLC, and Al Seer Marine Supplies & Equipment Company LLC, for joint production of weaponry and amphibious tanks.
In the same month, train component manufacturer Barata signed a $11.8 million contract with the United States-based Wabtec Corporation to supply train bogies and components.
“Meanwhile PAL is looking to ink a contract with Malaysia in August to build a warship, and PTDI is currently discussing with buyers of CN-235 from Thailand and Myanmar,” Indonesia Eximbank director Dwi Wahyudi said.
Dwi added that not all of the facilities would be disbursed in 2017 because the SOEs’ deals were mostly multiyear contracts. He pointed to INKA, which sealed a contract worth Rp 7.2 trillion last year but only absorbed Rp 372.51 billion of the facility.
“These types of exports are relatively high risk and the destinations are mostly new markets. Other banks do not want to take them, so the government has assigned us through the NIA [National Interest Account] scheme,” Dwi said.
All in all, the bank is aiming for a 18.7 percent increase in its financing to Rp 105.09 trillion, from Rp 88.53 trillion last year. The company plans to raise Rp 20.05 trillion from a bond issue, with Rp 8.7 trillion of this being used to refinance its mature debts.
Director Raharjo Adisusanto said some Rp 14 trillion of the bonds would be offered in rupiah, and the remaining Rp 6.05 trillion would be in US dollars. “We have seen more of our customers shifting from dollar-denominated facilities to the rupiah because of the government’s requirement to use the rupiah for trading,” he said.
