The Asian Infrastructure Investment Bank (AIIB) is ramping up its investment in digital infrastructure among its members, with a USD150-million nonsovereign loan to Satelit Nusantara Tiga (SNT) for a multi-functional satellite that will cover 45 million people. The satellite will provide much-needed broadband internet service to more than 149,400 unserved public service points, including schools, hospitals and local government locations in some of the least developed regions of Indonesia.
With its population of 265 million people, Indonesia is the world’s fourth most populous country. Currently, more than 10,500 villages still do not have cellular network coverage, and fiber optic cables primarily serve only urban areas. Satellite coverage is indispensable to serve remote and underserved areas.
Initiated by Indonesia’s Ministry of Communication and Informatics, the project is one of the top priorities of the government and aims to provide broadband internet via satellite to government institutions at the fastest speed and at the cheapest price to close the digital divide in the country.
“We at SNT are delighted to have approval from AIIB’s Board of Directors for the financing of the project of the Government of Indonesia. The USD150-million long-term financing provided by AIIB is a key part of the fully syndicated financing package of USD435 million. We hope to have approval from the French Export Credit Agency, Bpifrance, and Korea Development Bank to provide the balance of the syndicated financing,” said Adi Rahman Adiwoso, SNT President Director.
“As the first satellite public-private partnership (PPP) project to be supported by AIIB, this ambitious engagement with Indonesia will offer the Bank a valuable opportunity to deepen our broader understanding of the satellite and telecommunications sector in the region, including the opportunities and challenges in structuring similar satellite PPP projects,” said AIIB Vice President, Investment Operations, D.J. Pandian. “The project is closely aligned with the Bank’s Digital Infrastructure Sector Strategy, which allows us to draw on AIIB’s solid skill sets in developing project finance structures and PPP frameworks in the digital infrastructure sector.”
This will be the first satellite PPP project to be supported by AIIB and will be cofinanced in conjunction with HSBC, Santander and Korea Development Bank. Bpifrance is acting as the export credit agency for the debt provided by HSBC and Santander, and for part of the debt provided by Korea Development Bank.
Additional information about the Indonesia Multifunctional Satellite Public-Private-Partnership Project can be found here.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 103 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.