Buyer’s Credit for Indonesia’s Telecommunications Carrier
Supporting Japanese Export of High-Capacity Telecommunications Infrastructure to Asia

• Region: Asia
• Machinery and Equipment
• Export Loans

1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)^*1 signed on March 26 a buyer's credit^*2  agreement totaling up to approximately 60 million US dollars with PT. Telekomunikasi Indonesia, Tbk (TELKOM) incorporated in the Republic of Indonesia.  The loan is cofinanced with Mizuho Corporate Bank, Ltd.
    
2. This is the first loan that JBIC provides to TELKOM, one of the largest telecommunication carriers in Indonesia, to finance a project in which TELKOM will install a high-capacity submarine optic-fiber cable system around Kalimantan, Indonesia.  Since the telecommunication machinery and equipment used in this project are manufactured by Fujitsu Limited, the loan supports Japanese firm's export activities.
    
3. The demand for telecommunication network services is projected to increase rapidly in Indonesia, driven by robust economic growth, and the development of domestic telecommunication infrastructure is considered a significant national agenda.  TELKOM and other carriers in Indonesia therefore are expected to play an important role in the expansion and improvement of such infrastructure.  This loan is expected to accelerate the telecommunication infrastructure development in the country, and will contribute to invigorating Indonesia's economic activities by upgrading it's telecommunication environment.
    
4. This buyer's credit is provided by JBIC relying on TELKOM's corporate credit.  Given that demand for infrastructure investment is projected to increase in Asia, JBIC intends to strengthen support for the business development including the expansion of export opportunity of Japanese firms in infrastructure projects through a variety of financial functions including corporate risk-taking operations for local firms similar to those applied to this loan.

Note

1. *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
2. *2 A buyer's credit is a loan JBIC directly extends to a foreign importer (buyer) to finance its import of machinery and equipment from a Japanese firm.
3.