ADB approves $218m for RI's natural gas plan

ADB approves $218m for RI's natural gas plan

MANILA (AFP): The Asian Development Bank (ADB) approved yesterday its extension of a US$218 million loan to Indonesia to expand and promote the use of natural gas there.

The loan is part of a $590 million project to improve Indonesia's air quality by providing a common carrier gas transportation system, encouraging private sector participation and establishing a regulatory framework for the gas industry, the ADB statement said.

The loan is supplemented by a $450,000 ADB grant to develop a gas regulatory framework and is also financed by Japan's Exim Bank, the European Investment Bank, and the state-run Perum Gas Negara, it added.

ADB's ordinary capital resources are financing the loan, to be repaid over 20 years and an interest rate to be determined by the bank's pool-based variable lending rate, it said.

The ADB also announced yesterday that four million people living in three major Vietnam cities will benefit from an $80 million loan to rehabilitate and expand power distribution facilities.

The loan will go to the construction of substations and transmission lines and provide equipment, tools and consulting services for the power projects' implementation in Hanoi, Hai Phong and Nam Dinh, the ADB statement said.

About $1.4 million has been allocated for technical assistance grants to provide training and improve financial management of power companies, it added.

Seventy percent of the projects' total cost is funded by the loan, which has a term of 40 years and a service charge of one percent per annum.