Palapa Ring West Broadband

Active

Prospective

Palapa Ring Broadband project consists of three sections - West, Central and East and will stretch 11,000 kilometers of fiber optic cable across the archipelago. It involves a huge undersea fiber-optic cable network that will offer faster broadband to the entire archipelago. The West package entails the laying of 1,980 km submarine fiber-optic cable connecting Riau province, the Riau Islands and the Natuna Island of Sumatra. PT Palapa Ring Barat is a consortium consisting of Mora Telematika Indonesia and Ketrosden Triasmitra. The former owns 90 per cent ownership in the consortium and the latter 10 per cent. Palapa Ring Broadband is a greenfield project undertaken under BOOT basis. Following a tender process, the consortium was entitled to a 15-year concession for the broadband connection worth Rp 1.71 trillion ( approximately $127 million) in net present value. The concessionaires would recoup their investment through the availability payment scheme. Thus, the consortium does not collect fees from the fiber optic connection. Instead, they get guaranteed payments from the government over the period of the concession, as long as they deliver the project as specified. The broadband connection cost IDR 1.28 trillion ($97.5 million as per financial closure date). In July, 2016 the state-controlled financial institution Bank Mandiri agreed to a IDR 875 billion ($66.7 million as per FC) loan for the West Palapa Ring project. This loan has an eight year term with a grace period of two years. Debt funding represents 68 per cent of the total investment. The remaining financing is provided by project's sponsors, amounting to $30.8 million. Financial closure occurred in July, 2016 after the consortium tied up funds from state-controlled Bank Mandiri. https://www.kominfo.go.id/content/detail/9496/siaran-pers-no-35hmkominfo032017-tentang-rudiantara-paket-pembiayaan-program-palapa-ring-paket-timur-telah-terpenuhi/0/siaran_pers http://nusantaraeconomics.com/new-blog/2016/1/29/palapa-ring-west-and-central-packets-awarded http://jakartaglobe.id/business/government-agrees-rp-1-7t-west-palapa-ring-concession/ http://www.indonesia-investments.com/news/todays-headlines/palapa-ring-project-indonesia-construction-west-section-to-start/item7121? http://www.theinsiderstories.com/presiden-menyaksikan-penandatanganan-perjanjian-kerjasama-palapa-ring-di-istana-negara/ Parties in Palapa Ring Barat consortium are Mora Telematika with 90 per cent stake, and Kertrosden Triasmitra with 10 per cent. Penjaminan Infrastruktur Indonesia (PII), state- controlled infrastructure guarantee fund, provides insurance on the availability payments.

Information and communication technology (ICT)

World Bank Group

Project

Water Supply and Storage, Commercial, Broadband, Seaport, Telecommunications, Government