Hanafiah Ponggawa & Partners successfully represented a bank syndicate in the financing of Palapa Ring Project East Package

Hanafiah Ponggawa & Partners successfully represented a bank syndicate in the financing of Palapa Ring Project East Package

As the winner of the tender for a government infrastructure project titled the Palapa Ring Project East Package, where the whole of Indonesia will be linked by fiber optic, PT Palapa Timur Telematika (“PTT”) obtained syndicated loan facilities in the amount of IDR 4,004,000,000,000 from a bank syndicate of five banks, led by PT Bank Negara Indonesia (Persero) Tbk. (BNI). The bank syndicate also included Bank ICBC Indonesia, Papua Bank, Bank Sulselbar, and Bank Maluku Malut (“Syndicated Facility Agreement”).  The Syndicated Facility Agreement was guaranteed by the Indonesian Infrastructure Underwriter company, PT Penjaminan Infrastruktur Indonesia (Persero).

In this major transaction, Hanafiah Ponggawa & Partners (HPRP)  assisted the bank syndicate in the preparation of relevant documents required for the transaction, including agreement documents, security documents, as well as arranging the negotiations, legal due diligence, regulatory compliance and finalisation of the facility. HPRP was also requested by the bank syndicate to review (i) Perjanjian Kerjasama (the cooperation agreement) entered by PTT and Ministry of Communication and Informatics of the Republic of Indonesia, (ii) Perjanjian Penjaminan (the guarantee) provided by PT Penjaminan Infrastruktur Indonesia (Persero) (PII) to PTT, and (iii) the Project Agreements e.g., EPC, Maintenance and Operating Agreement, to assess whether these agreements will be in line with the Syndicated Facility Agreement.

The Palapa Ring Project East Package consists of the construction of 8,454km of fiber optic network, which will be the national broadband telecommunications system backbone acting as an information highway connecting all cities in commercially unprofitable areas. The development will reach 35 cities in Nusa Tenggara Timur, Maluku, and West Papua to inland Papua. This is one of the government’s efforts to accelerate development and economic equality in all regions of Indonesia.

Partner Chadri Jurnalis led the team in this transaction. The transaction was assisted by Senior Associates Michael Kaihatu, Dinda Karina and Associates Osha Adyancha, Aditya Parlindungan Sitanggang and Sari Veratiwi. 

Hanafiah Ponggawa & Partners and RHTLaw Taylor Wessing are members of the ASEAN Plus Group (APG), a group of full service and well established law firms across 12 jurisdictions, offering clients access to more than 1,000 lawyers in the opportunity-rich ASEAN region and beyond.