AIIB approves USD150-m loan to improve digital connectivity in Indonesia

The Asian Infrastructure Investment Bank (AIIB) is ramping up its investment in digital infrastructure among its members, with a USD150-million nonsovereign loan to Satelit Nusantara Tiga (SNT) for a multi-functional satellite that will cover 45 million people. The satellite will provide much-needed broadband internet service to more than 149,400 unserved public service points, including schools, hospitals and local government locations in some of the least developed regions of Indonesia.

With its population of 265 million people, Indonesia is the world’s fourth most populous country. Currently, more than 10,500 villages still do not have cellular network coverage, and fiber optic cables primarily serve only urban areas. Satellite coverage is indispensable to serve remote and underserved areas.

Initiated by Indonesia’s Ministry of Communication and Informatics, the project is one of the top priorities of the government and aims to provide broadband internet via satellite to government institutions at the fastest speed and at the cheapest price to close the digital divide in the country.

“As the first satellite public-private partnership (PPP) project to be supported by AIIB, this ambitious engagement with Indonesia will offer the Bank a valuable opportunity to deepen our broader understanding of the satellite and telecommunications sector in the region, including the opportunities and challenges in structuring similar satellite PPP projects,” said AIIB Vice President, Investment Operations, D.J. Pandian. “The project is closely aligned with the Bank’s Digital Infrastructure Sector Strategy, which allows us to draw on AIIB’s solid skill sets in developing project finance structures and PPP frameworks in the digital infrastructure sector.”

This will be the first satellite PPP project to be supported by AIIB and will be cofinanced in conjunction with HSBC, Santander, and Korea Development Bank.

Original source: AIIB