The Indonesia Tourism Development Corporation (ITDC) has secured a US$248.4 million loan from the Asian Infrastructure Investment Bank (AIIB) to finance an urban and tourist infrastructure project in the Mandalika Special Economic Zone (SEZ Mandalika).
“The financing reflects investors’ confidence in the prospects of tourism in Indonesia, particularly in Mandalika,” ITDC president director Abdulbar M. Mansoer said in a press statement received by The Jakarta Post on Tuesday.
He said AIIB’s board of directors approved the loan on Dec. 7, 2018, while the lender and ITDC — a state-owned company assigned to develop and manage various aspects of tourism in Nusa Dua, Bali, and Mandalika, West Nusa Tenggara — had completed the loan agreement on Dec. 31.
ITDC finance director Nusantara Suyono explained the tenor for the project was set at 35 years and a grace period of 10 years with an interest rate adjusted to the London InterBank Offered Rate (LIBOR) at 6 percent, plus an additional 1.4 percent per year.
Nusantara said the fund would be used to finance the construction of infrastructure and basic facilities in SEZ Mandalika, including clean water, sanitation, drainage, waste treatment, electricity distribution, disaster mitigation and open public space facilities.
He added that the development of infrastructure was expected to bring in foreign investment, with a target to develop tourist facilities that include 10,000 rooms at star-rated hotels, convention centers, a 27-hole golf course, commercial facilities, hospitals and a street race circuit for MotoGP.
Abdulbar said the project also covered facilities in the zone’s surrounding areas to ensure that the local people also benefit from the project.