ICBC contributes $80 million to a $450 million syndicated loan for Krakatau Steel’s Blast Furnace Project in 2011 (Linked to Record ID#96652, 66187)

CDB and ICBC contributions to 450 million USD syndicated loan for Krakatau Steel’s Blast Furnace Project In May 2011, Indonesia’s state-owned steel company Krakatau Steel won a $450 million syndicated loan to finance the construction of Krakatau Steel’s blast furnace complex.

The loan includes a $200 million debt facility provided by the China Development Bank ($80 million) (captured in Record ID#96652), the Industrial and Commercial Bank of China ($80 million), and HSBC ($40 million).

It also includes a $250 million domestic facility extended by Bank Negara Indonesia, Bank Rakyat Indonesia, and Bank Mandiri.

HSBC is the coordinating and structuring bank of the overall package, as well as mandated lead arranger and lender under the $200mn debt facility. Sinosure is covering 95% of the $200mn debt facility.

The purpose of the project was to construct a new blast furnace complex — consisting of a Blast Furnace, Sintering Plant, Coke Oven Plant, Pig Iron Caster, Stockyard and Material/Hot Metal Handling — at the Krakatau Steel Plant in the city of Cilegon within Banten Province.

Upon completion, it was envisaged that the project would be capable of producing 1,200,000 metric tons per year of hot metal and pig iron.

MCC-CERI Consortium and PT Krakatau Engineering (a wholly-owned subsidiary of PT Krakatau Steel) were jointly responsible for implementation. The project commenced on September 8, 2013. The project commenced on September 8, 2013.

By the end of 2018, the project had achieved a physical progress rate of 99.73%, and the project was completed in 2019 according to Krakatau Steel. Since then, the project was deactivated due to being inefficient.

A three stage reactivation plan was initiated in October 2022, which will be carried out as a collaborative effort between Krakatau Steel and Baowu Zhongnan Co. Ltd.