The Government of Indonesia has rejected calls to use the state budget to cover mounting debt from the USD7.27 billion Jakarta–Bandung high-speed railway (HSR), financed largely by China Development Bank. Finance Minister Purbaya Yudhi Sadewa stated that repayment responsibility lies with sovereign wealth fund Danantara, which manages dividends from over 1,000 state-owned enterprises (SOEs). He said Danantara should allocate part of its IDR80 trillion (USD4.8 billion) in SOE dividends to meet the annual debt repayment of IDR2 trillion (USD120 million) instead of relying on public funds.
The Chinese Foreign Ministry signaled its willingness to support debt restructuring discussions to ensure the line’s continued operation, emphasizing its broader socio-economic benefits. The high-speed railway is operated by Kereta Cepat Indonesia China (KCIC), a joint venture between Pilar Sinergi BUMN Indonesia (60 per cent) and a Chinese consortium (40 per cent).
The China Development Bank financed 75 per cent of the original budget with a 2 per cent annual interest rate, along with a USD1.2 billion loan for cost overruns at 3.4 per cent. The project has faced financial strain, with PSBI, the Indonesian consortium, posting a loss of IDR4.19 trillion (USD251.8 million) in 2024 and lower-than-expected ridership—6.06 million passengers, far below the 31 million annual target.