KfW -- A long-standing partner of Indonesia<\/p>\n
By Dr. Gert Vogt<\/p>\n
Kreditanstalt fuer Wiederaufbau (KfW) was founded by law in
\n1948 as a corporation under public law domiciled in Frankfurt am
\nMain. Its functions are those of a promotional bank for the
\ndomestic economy and a development bank for developing countries.
\nKfW is owned by the Federal Republic of Germany and its Federal
\nStates. With a balance sheet total of about DM 290 billion, it
\ncounts among Germany's large banks.<\/p>\n
German Financial Cooperation with Indonesia<\/p>\n
Under the Financial Cooperation of the Federal Republic of
\nGermany with developing countries, KfW finances investments and
\nproject-related advisory services on behalf of the German Federal
\nGovernment for the expansion of social and economic
\ninfrastructure, industry and for improving the protection of the
\nenvironment and natural resources.<\/p>\n
KfW also supports economic and sector reforms in developing
\ncountries. Commitments under Financial Cooperation today
\nrepresent roughly one-third of the entire official development
\ncooperation of the Federal Republic of Germany.<\/p>\n
Indonesia is one of the most important partner countries of
\nFinancial Cooperation. Since the beginning of development
\ncooperation in 1961, almost DM 4 billion in loans and grants have
\nbeen committed under Financial Cooperation for the implementation
\nof more than 120 projects.<\/p>\n
Its current priority sectors are transport (railroads,
\nports\/maritime transport), energy, health care and drinking water
\nsupply, protection of the environment and natural resources and
\neducation.<\/p>\n
Export and Project Financing<\/p>\n
In the field of export and project financing, KfW provides
\nmedium and long-term loans for the export of German capital
\ngoods. The bank has developed a specific know-how in complex and
\nlarge project finance structures as well as in the transportation
\nsector (ships, aircraft, infrastructure).<\/p>\n
In Indonesia, it has been active for more than 35 years in
\nthis field. Loan agreements with Indonesian borrowers amount to a
\ntotal volume of approximately DM 10 billion. The majority of the
\nloans were provided for the promotion of industry and
\nenvironmental technology, power and energy, telecommunications
\nand raw materials extraction as well as in the transportation
\nsector.<\/p>\n
In ship financing, for example, KfW looks back to a long-
\nlasting and successful cooperation between Indonesia and Germany.
\nWith commitments of about DM 2.3 billion, mostly granted under
\nsovereign risk to the government, Indonesia is one of KfW's most
\nimportant partners in this sector.<\/p>\n
The largest and very successful project in this cooperation is
\nthe delivery and financing of a fleet of now 20 passenger
\nvessels. All the vessels -- with total order value of DM 1.8
\nbillion -- were ordered in Germany and financed by long-term
\nloans from KfW.<\/p>\n
Besides the passenger vessels KfW has also financed some gas
\ntankers, container vessels and dredgers for Indonesia.<\/p>\n
Promotion of Direct Investment<\/p>\n
In the framework of its extensive financing commitment to
\nGerman small and medium sized enterprises (SMEs), KfW also
\npromotes direct investment of German SMEs in Indonesia and
\ninvestments of German-Indonesian SME joint-ventures by special
\ncredit schemes. It offers long-term financing at favorable
\nconditions and hereby is assuming 50 percent of the credit risks.<\/p>\n
In case of investments with strong environmental impacts, KfW
\nis ready to support the financing at even more attractive
\nconditions, and also for bigger enterprises. A special example of
\na German direct investment in Indonesia is the German Center for
\nIndustry and Trade in Bumi Serpong Damai, often known as German
\nHouse, which focuses especially on SMEs from Germany that want to
\nenter into business in Indonesia. KfW has financed this
\ninvestment through an attractive long-term loan.<\/p>\n
KfW's Special Support for overcoming the Current Crisis<\/p>\n
As an immediate response to the current economic crisis in
\nIndonesia, KfW is preparing rehabilitation and recovery measures
\nunder sector-based, fast-disbursing Financial Cooperation
\nprograms for the transportation, energy and health sectors.<\/p>\n
These programs, which concentrate on maintaining the operation
\nof already existing facilities, will be an important contribution
\nto job creation and economic recovery and to maintaining basic
\nsocial services for the population.<\/p>\n
In addition, two commercial credit lines amounting to DM 300
\nmillion were concluded in July 1998 between KfW and the Indonesia
\nMinistry of Finance following a Memorandum of Understanding
\nsigned in February 1998 between the Ministers of Finance of
\nIndonesia and Germany.<\/p>\n
One credit line is a framework agreement for DM 250 million
\nwhich facilitates imports of German capital goods to Indonesia.
\nIt is focusing primarily on the private sector and enables
\nIndonesian enterprises to cover their import needs.<\/p>\n
The prime objective of the second loan facility of DM 50
\nmillion, is to support commercially sound Indonesian SMEs by
\nfunding medium to long-term investment loans as well as loans to
\nbridge short-term liquidity gaps. This loan facility is not tied
\nto German exports but can be used by the SMEs for purchases from
\nany origin, including Indonesia itself.<\/p>\n
In order to support and facilitate the cooperation with its
\nIndonesian partners, KfW opened an office in Jakarta in June
\n1998. This testifies also to the prominent role of Indonesia as a
\npartner of KfW.<\/p>\n
Another recent event also demonstrates the long-standing
\nrelationship between Indonesia and Kreditanstalt fuer
\nWiederaufbau. On Sept. 23, 1998, it organized at KfW in Frankfurt
\nthe conference Indonesia Today in order to bring Indonesian and
\nGerman businesspeople together.<\/p>\n
Prof. Dr. Ir. Rahardi Ramelan, Minister of Industry and Trade
\nof Indonesia, who was accompanied by Government officials and
\nmore than 30 Indonesian businesspeople, gave a clear picture of
\nthe present economic and social situation in Indonesia and the
\npolitical and economic reforms that have so far been undertaken
\nby the Indonesian Government.<\/p>\n
Dr. Gnter Rexrodt, Federal Minister of Economics of Germany,
\nunderscored the importance of Indonesia for the development of
\nthe Southeast Asia area and ensured Indonesia the partnership of
\nGermany in these difficult days.<\/p>\n
KfW is still confident in the strategies of Indonesia and it
\nis very much willing to support its partners in these difficult
\ndays. However, political stability will be the precondition for
\nregaining trust and therewith further foreign investment.<\/p>\n
Dr. Gert Vogt is KfW's Chairman of the Board of Managing
\nDirectors.<\/p>\n
Any questions, recommendations and comments concerning KfW's
\noperation with Indonesia please forward to:<\/p>\n
KfW-office Jakarta<\/p>\n
Dr. Christine Heimburger<\/p>\n
Skyline Building, 8th floor<\/p>\n
Jl. M.H. Thamrin No. 9<\/p>\n
Jakarta 10340<\/p>\n
Tel. (021) 327875<\/p>\n
Fax. (021) 3148438<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/kfw-a-long-standing-partner-of-indonesia-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }