BUPI to Warranty Infrastructure Projects

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation
Date 8 September 2018
Category: News
Read: 1.112 Views

LRT-JabodebekThe Minister of Finance (Menkeu) Sri Mulyani Indrawati through Regulation of Minister of Finance (PMK) No. 101/PMK.08/2018, issued on August 24th, assigned Infrastructure Assurance Agency (BUPI), a State-owned enterprise formed by Government Regulations (PP) No. 35 of 2009 to give assurance or warranty on 3 (three) infrastructure projects.

The Infrastructure projects given warranty are Sumatra Highway Project that is being developed by PT Hutama Karya, Electricity Infrastructure owned by State-Owned Electricity Company (PLN), and Light Rail Transit Project in Jakarta, Bogor, Depok, and Bekasi (Jabodebek).

The Regulation stated that BUPI gives direct loans assurance on a First Loss Basis, with the following terms: a. BUPI shall guarantee the minimum portion of warranty, namely the nominal amount of the whole financial obligations of the guaranteed (party) during the first 12 months after the grace period ends or a bigger warranty portion from the minimum portion of warranty; b. the government shall guarantee the remaining portion of warranty undertaken by BUPI.

Article 4 paragraph 2 point b mentioned, “In the event that BUPI acts as a single guarantor, all warranty portion shall be undertaken by BUPI”.

According to the Ministerial Regulation, Joint Warranty and BUPI’s Warranty on the development of Sumatra Highway projects shall include: a. assurance on PT Hutama Karya’s loan; and b. assurance on PT Hutama Karya’s bond.

According to PMK article 6 paragraph (2): “BUPI shall act as a Single Guarantor in giving warranty on PT Hutama Karya’s loan and PT Hutama Karya’s bond warranty.”

Meanwhile the warranty for the acceleration of electricity infrastructure development shall be given by BUPI to PLN under the Loan Agreement Over Default Risk.

“PLN’s loan assurance shall be given on the whole amount of financial obligation of PT PLN to creditor, which consists of due-dated principal and interest as well as other expenses under the Loan Agreement.”

As for Jabodebek LRT Project, BUPI assurance shall consist of: a. PT KAI’s Loan Warranty; and b. bond Warranty for PT KAI.

Loan Assurance to PT KAI, may be given in full or partial from PT KAI’s financial obligation, that consist of principal payment and interest due altogether with its fines and other expenses according to the Loan Agreement.

As stated in Article 29 of the PMK, it is effective on August 27th, 2018, the same date of its promulgation. the Regulation was promulgated by the Director General of Laws and Regulations, Ministry of Law and Human Rights, Widodo Ekatjahjana. (JDIH Kemenkeu/ES)(HYP/LW/Naster)

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