Indonesia’s state-owned steel company Krakatau Steel has won a US$450mn syndicated loan partly covered by China’s export credit agency, Sinosure.

An HSBC spokesperson confirms to GTR that Sinosure is covering 95% of a US$200mn debt facility provided by the China Development Bank (US$80mn), the Industrial and Commercial Bank of China (US$80mn) and HSBC(US$40mn). The loan also includes a US$250mn domestic facility extended by Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Mandiri,  in May 2011.

The deal has a tenor of 11.5 years, including three years for construction. HSBC was the co-ordinating and structuring bank of the overall package, as well as mandated lead arranger and lenders under the Sinosure-covered facility.

The loan will be used to finance the construction of Krakatau Steel’s blast furnace complex, which will produce 1.2 million tonnes of hot metal a year.

The complex based in the Cilegon district, western Java is expected to start operations in 2014. Construction of the project will be undertaken by an engineering, procurement and construction (EPC) consortium led by Chinese firm MCC Capital Engineering & Research Incorporation.