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PT MTU Detroit Diesel Indonesia

$0.89 million
Project Brief
Not Active

In 2003, MIGA issued two guarantees to MTU Asia Pte. Ltd. (MTU Asia) of Singapore covering its $0.6 million equity investment in, and $1.8 million shareholder loan to, PT MTU Detroit Diesel Indonesia (PT MDDI), in Indonesia. MTU Asia is a wholly owned subsidiary of MTU Friedrichshafen of Germany, one of the largest suppliers of diesel engines worldwide. PT MDDI is 99 percent owned by MTU Asia and 1 percent owned by PT Daimler Chrysler Indonesia (see FY03 Annual Report).

In FY06, MIGA issued another $0.89 million in guarantees to MTU Asia, covering its additional capital investment of $1 million into PT MDDI. The new capital will be used to expand MDDI's operations by establishing a workshop for selling spare parts and for providing service and maintenance of diesel engines in Balikpapan, Kalimantan East, Indonesia. The expansion is in response to customer demand for a service workshop in Balikpapan.

This expansion is expected to create 35 new jobs, 34 of which will be local hires and one of which will be a technical expatriate who will oversee day-to-day operations. Technical training will be provided for technicians in either the Jakarta or Singapore workshops. In addition to creating employment in Balikpapan, PT MDDI will provide health insurance to all employees and their immediate family members. The project is also expected to generate approximately $50,000 a year in tax revenues for the government of Indonesia.

The project was underwritten using MIGA's streamlined procedures for small and medium-size investors under its new Small Investment Program.

--Contract cancelled--