| Company | PIDG |
| Sector | Digital Communications |
| Country | Indonesia |
| Total Project Cost | USD 42.75m |
| PIDG Commitment |
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| Dates of PIDG involvement |
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Indonesia is lagging behind in terms of internet speed compared to many other ASEAN countries. The average download speed in Indonesia is around 20 Mbps, compared to Singapore with speeds of over 200 Mbps, or Thailand which averages 50 Mbps (Speedtest Global Index 2024). Internet tariffs are also relatively high compared to other ASEAN countries. Nusa Tenggara and Sulawesi are traditionally lesser connected and lesser economically developed regions in Indonesia, with Indonesia also generally underdeveloped in terms of telecom connectivity (ranking 8/9th among 11 ASEAN countries).
GuarantCo is providing two 100 per cent payment default guarantees that will together cover up to IDR 730 billion (c. USD 42 million) of bonds to be issued by Triasmitra, a market-leading publicly listed telecommunications infrastructure company in Indonesia. The proceeds of these bonds will support the development and construction of a 2,600km+ greenfield subsea fibre optic cable system across the central Indonesian islands including Bali, Nusa Tenggara, Sulawesi and smaller islands. The project is designed to bridge the gap between Indonesia’s central and western backbone cable networks, supporting the Indonesian Government’s broader initiative to enhance internet connectivity across the country.
The new network will offer c. 5.3 million people better connectivity and cheaper internet provision to help reduce the digital divide, which is currently limiting access to equal participation in the digital economy, education and public service access.
This transaction will help drive greater competitiveness in an inherently monopolised market. This will improve the availability and quality of bandwidth to individual and corporate end-users in the regions, which is important for economic recovery and a key factor in future productivity growth.
This transaction features two firsts in the country: the 10-year guaranteed bonds have the longest tenor of a financial product of its kind, and the first ever amortising guaranteed bonds, which are uniquely structured to support the funding of long-term digital infrastructure assets. It is hoped that this will stimulate transformation through replication.
The deal succeeded in crowding in private sector participation, with the guaranteed bonds subscribed by major institutional investors including Manulife Indonesia and Generali Indonesia.
This transaction was supported by technical assistance grants for the legal and regulatory engagement work required to develop the guarantor documentation for the bonds in line with international best practice.
As part of this transaction, Triasmitra has committed to the promotion of gender equality across its workforce in the currently male-dominated high value digital sector. Triasmitra will develop a Gender Action Plan to strengthen the gender-responsiveness of its policies and practices and gradually increase the share of women in the workforce.
