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. 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 Widodo’s office.
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 percent of total costs, which are expected to reach $6 billion, Wiryawan was quoted by Tempo.co as saying.
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.