The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide a US$24mn loan to Indonesia’s PT Astra Otoparts Tbk, which manufactures and distributes automotive components for domestic automotive companies and for the domestic and export replacement market.
The loan, one of the first of its kind, provides the borrower with the option to draw down funds in either US dollars or Indonesian rupiah. The loan will support Astra Otoparts “and its subsidiaries “efforts to enhance their product and process engineering skills and to strengthen their position in the replacement market.
“The loan supports the development of a local Indonesian company and will help it remain competitive in an increasingly open global marketplace,” says Dimitris Tsitsiragos, the director of IFC’s Global Manufacturing and Services Department.
IFC’s country manager for Indonesia, German Vegarra, adds: “IFC’s capacity to provide long-term Indonesian rupiah financing gives Astra Otoparts the ability to avoid foreign exchange risk if needed while helping fuel growth with long-term capital.”
PT Astra Otoparts Tbk is an operating holding company with 28 partly and wholly-owned affiliates and subsidiaries that manufactures and distributes automotive components. The company and its subsidiaries directly employ over 17,000 people.
PT Astra Otoparts is majority owned by PT Astra International Tbk., a large Indonesian group of companies with businesses in automotive, financial services, heavy equipment, agribusiness, information technology and infrastructure. The whole Astra group employs more than 100,000 people throughout Indonesia.