The International Finance Corporation (IFC) is considering a local currency loan to PT Link Net Tbk to refinance existing debt and support the company’s capital expenditure program for expanding fiber-to-the-home (FTTH) infrastructure across Indonesia, reinforcing development finance support for Southeast Asia’s digital backbone.
The proposed financing will fund Link Net’s FY2025–2026 network rollout in Java and Sumatra, where the company has been focusing exclusively on fiber expansion since 2020 as demand for high-speed fixed broadband accelerates.
Link Net, controlled by Axiata Group Berhad, operates intra-city broadband networks in 56 Indonesian cities. As of May 2025, its infrastructure included 32,786 km of FTTH fiber and 16,346 km of hybrid fiber-coaxial (HFC) cable, serving 4.31 million homes passed and about 2,300 enterprise customers.
The company’s network is managed through two data centers located in Jakarta and Surabaya and a national network operations center in Jakarta.
Its operations focus on last-mile connectivity, while upstream national and international backbone capacity is secured through long-term indefeasible right-of-use arrangements.
IFC said the transaction would mark its first direct exposure to Link Net, although it has maintained a long-standing relationship with Axiata, including active telecommunications projects in Bangladesh and Sri Lanka.
Environmental and operational review
Because the loan is corporate in nature, IFC’s due diligence focused on the company’s environmental and social management systems across network planning, construction, and operations.
The review included site visits to above- and underground cable installations in Banten Province, as well as meetings with management teams overseeing network development, operations, sustainability, supply chain, and regulatory compliance.
The project has been classified as Category B under IFC’s sustainability framework, indicating limited and site-specific environmental and social impacts.
Expansion activities are expected to take place largely within existing urban corridors, requiring minimal land acquisition.
Key risk areas identified include contractor management and occupational safety, resource efficiency and greenhouse gas management, waste handling, biodiversity screening for sensitive locations, and stakeholder engagement, including community grievance mechanisms.
The proposed financing highlights a growing role for development finance institutions in supporting fiber infrastructure, which is increasingly viewed as essential economic infrastructure alongside power and transport.
For Indonesia, where fixed broadband penetration remains uneven across urban and secondary cities, last-mile fiber expansion is a critical enabler of digital services, enterprise connectivity, and cloud adoption.
The use of local currency financing also reflects a broader shift by multilateral lenders to reduce foreign exchange risk for infrastructure operators with predominantly domestic revenue streams.
For infrastructure investors, the transaction underscores continued capital demand in Southeast Asia’s fiber sector, where operators are accelerating network upgrades to support rising data consumption and digitalization across large urban markets.
InfraCapitalAsia.com
