Indonesia confirms funds to cover high-speed rail debt obligations

Speaking at the Presidential Palace, Finance Minister Purbaya Yudhi Sadewa stated that the government will not seek external investors to service the project’s debt, as required capital will be drawn from state-owned enterprises operating under the ministry’s purview.

“No, the money is already there,” Purbaya said.

Under the restructuring plan, the ministry will acquire a 60 percent stake in PT Pilar Sinergi BUMN Indonesia (PSBI)—a consortium comprising state rail operator PT KAI, PT Wijaya Karya, PT Jasa Marga, and PTPN III—from sovereign wealth fund Danantara Indonesia.

The transaction involves zero payment to Danantara, meaning the ministry receives the equity participation at no upfront cost while assuming full responsibility for future debt service through a designated Special Mission Vehicle (SMV) or Public Service Agency (BLU).

The remaining 40 percent stake in the operating company, PT Kereta Cepat Indonesia China (KCIC), held by a Chinese consortium, will remain unchanged.

Purbaya expressed confidence in the financial capacity of the ministry’s commercial entities, noting that typical SMVs under its oversight generate annual profits ranging from 3 trillion to 4 trillion rupiah ($170.1 million to $226.8 million).

He added that the specific SMV slated to manage the high-speed rail holding yields an annual net profit of up to 800 billion rupiah ($45.4 million).

The restructuring aims to address ongoing debt concerns surrounding the Whoosh high-speed rail project, which have weighed heavily on the balance sheet of lead consortium member PT KAI.

Detailed debt calculations will be finalized once the equity transfer process is complete.

Translator: Maria Cicilia Galuh P./Genta Tenri Mawangi/Yashint