Borrower Overview
TriLinc has provided financing to an Indonesian-based infrastructure and logistics provider, founded in 2004, that engages in infrastructure projects throughout the country. TriLinc’s financing will be used for the resurfacing of a section of a hauling road and reinforcing bridge infrastructure in South Sumatra. The completion of this project, which employs roughly 1,700 local contractors, transporters, security and local police, and daily workers, will help to relieve the public road congestion, constrained in terms of capacity and inefficiency, and decrease the prevalence of road accidents in the region. The road will eventually accommodate local communities through the construction of overpass bridges and movable barriers to allow safe pedestrian crossing of the road, and through supplying a bus line for the transport of local people to nearby markets and community centers.
The company has implemented various CSR activities in recent years that are focused on donating funds to sanitary services, provisioning electricity, maintaining public facilities and equipment, supporting fire and flood victims, giving out scholarships and educational material, and participating in community engagements and service, such as its greening campaign that provides seedlings to community members to plant small gardens where space is available.
Market Overview
Indonesia is classified as a lower-middle income country by the World Bank.1 Between 2010 and 2016, GDP growth rates averaged approximately 5.6%.1 The country’s main exports are concentrated in palm oil, coal briquettes, petroleum gas, crude petroleum, and jewelery.2 Conversely, the country’s main imports are focused in refined petroleum, crude petroleum, telephones, vehicle parts, and wheat.2
Indonesia meets TriLinc’s standards for its performance across relevant growth, stability, and access metrics.3 In 2016, it ranked 15th across the East Asia and Pacific region on the World Bank’s Ease of Doing Business Index.4 Corruption and inefficient government bureaucracy are seen as the most pressing hurdles currently facing the country’s productivity and competitiveness.5 As the 5th largest economy in the East Asia and Pacific region6 with a GDP of $932.3 billion, the country’s well developed macroeconomic environment, innovation, and business sophistication led the country to benefit from the estimated $493.2 billion in foreign direct investment that flowed into the region in 2016.7 Robust domestic demand across East Asia & Pacific region has helped spur regional GDP growth to 6.3% in 2016, and is projected to maintained at 6.1% by 2019.8
Additional Sustainability & Impact Highlights
- Construction and operational phases are all governed by the Indonesian RKL-RPL environmental permits and IFC Performance Standards. Additionally, in order to mitigate all environmental, health and safety risks, the company has implemented an Environmental Management System based on ISO 14000 standards to identify and control environmental risks, specifically around environmental monitoring, dust management, hazardous waste management, and training and awareness.
- The company’s employees are trained in topics such as hazard identification risk assessment, geo-services, operational supervision, OHSAS 18001 Occupational Health and Safety and ISO 14001 Environmental Management System, finance, and integrated management system awareness.
- The company covers its employees health insurance, life insurance, and retirement provisions, offers fair hiring and recruiting, fair career advancement that requires that each supervisor give coaching and counseling to its subordinates so they can get promotions to fill the vacant positions, fair compensation that ensures all of its employees obtain simultaneous raises every year in accordance with the classification of their position, and sexual harassments and child care support through providing protection and a breastfeeding room for the company’s female employees.
1The World Bank, World Development Indicators Database, Indonesia, 2016. 2The Observatory of Economic Complexity, Indonesia, 2016. 3There is no assurance that our investment in this company or this market will be successful. 4World Bank, Doing Business 2016 Measuring Regulatory Quality and Efficiency 5World Economic Forum, Global Competitiveness, 2017. 6The World Bank, World Development Indicators Database, 2016. 7The World Bank, Data, East Asia & Pacific, 2016. 8The World Bank, Global Economic Prospects, June 2017.
The above information is as of the initial date of investment: November 21, 2016.
This borrower is no longer a TriLinc fund investment.
An investment with TriLinc carries significant fees and charges that will have an impact on investment returns. Information regarding the terms of the investment is available by contacting TriLinc. This is a speculative security and, as such, involves a high degree of risk. Investments are not bank guaranteed, not FDIC insured and may lose value or total value. Some investments may have been made in an investment vehicle that is no longer open for investment. The highlighted investment may or may not have been profitable. There is no guarantee that future investments will be similar.
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