ADB grants $240m in loans to Indonesia

ADB grants $240m in loans to Indonesia

MANILA (Reuters): The Asian Development Bank (ADB) said on
Monday it has approved a total of US$240 million in cheap loans
to improve the infrastructure of Indonesia.

In a statement, the Manila-based multilateral bank said it
will extend $124 million for the construction of a new airport in
eastern Kalimantan province and another $116 million to improve
the water and drainage facilities of north Sumatra province.

The first project also involves the upgrading of two other
airports in west Kalimantan and west Irian Jaya, it said.

Besides the loan, ADB said a $975,000 technical assistance
grant from the Japan Special Fund will be given to Indonesia for
the upgrading of its airport facilities.

The airport modernization project, worth a total $278 million,
is scheduled for completion by 2002.

"Aviation is playing an increasing role in the development of
the region as the least-cost mode of long distance transport," it
said.

"Air traffic demand for the three airports is forecast to grow
at seven to nine percent annually over the long term," it added.

Meanwhile, the ADB said it has also approved a $116 million
loan to help finance a project to improve the water supply and
drainage facilities in north Sumatra province.

The Indonesian government will also provide a total of $72
million for the project, the ADB said.

"The project will improve, widen and extend over 30 km of
roads and bridges, extend flood control works on major rivers and
improve over 300 km of drains," it said.

Both loans are repayable over 25 years, including a grace
period of five years.