Indonesia, China consortium sign $4.5bn rail loan

Indonesia, China consortium sign $4.5bn rail loan

Indonesian President Joko Widodo (second from left) and the general manager of China Railway Corp Sheng Guangzu (centre) stand next to a train model as they attend a groundbreaking ceremony for the Jakarta-Bandung fast-train railway line in Walini, West Java province, on Jan 21, 2016. (Reuters photo)
Indonesian President Joko Widodo (second from left) and the general manager of China Railway Corp Sheng Guangzu (centre) stand next to a train model as they attend a groundbreaking ceremony for the Jakarta-Bandung fast-train railway line in Walini, West Java province, on Jan 21, 2016. (Reuters photo)

JAKARTA - A consortium of Indonesian and Chinese companies building Indonesia's first high-speed railway has signed a $4.5-billion loan with China Development Bank, Indonesia's government said on Monday.

Indonesian President Joko Widodo (left) shakes hands with Chinese President Xi Jinping during the welcome ceremony for the Belt and Road Forum, at the International Conference Center in Yanqi Lake, north of Beijing, on Monday. (EPA photo)

The head of the consortium, Hanggoro Budi Wiryawan, and the chairman of China Development Bank, Hu Huaibang, signed the loan in Beijing on Sunday, during a bilateral meeting between Indonesian President Joko Widodo and China's President Xi Jinping, according to a statement issued by Mr Widodo's office.

Mr Widodo was in Beijing to attend the Belt and Road Forum for International Cooperation.

Indonesia picked China over Japan to build the country's first fast-train rail link connecting its capital Jakarta to the textile hub of Bandung in 2015.

In the same year, several Indonesian state-owned companies, including Wijaya Karya and Jasa Marga, formed PT Kereta Cepat Indonesia-China (KCIC), a consortium with China Railway International Co Ltd, to build the project.

The loan would cover 75% of total costs, which are expected to reach $6 billion, Mr Wiryawan was quoted by Tempo.co as saying.

Mr Widodo's office said Indonesia was open to further cooperation in China's Belt and Road initiatives.

Indonesia, Southeast Asia's biggest economy, is trying to lure investors for a $450-billion infrastructure drive to revive economic growth.

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