ADB to disburse $150m in loans
Berni K. Moestafa, The Jakarta Post, Jakarta
The Asian Development Bank (ADB) said Monday it expected to disburse US$150 million in new loans to Indonesia, in what could be the first tranche of a $400 million loan deal with Jakarta.
ADB's Indonesia representative, Jan Van Heeswijk, said the loans were program loans tied to the country's corporate governance reforms.
"We approved the loans last week on Dec 4," Heeswijk told reporters, after a seminar on privatization.
He said the $150 million was initially part of the loans put on hold because the government fell short of meeting the loans requirements.
Government officials estimated that some $600 million in ADB loans were still in the pipeline due to slack progress in reform.
Heeswijk said a main criteria the government has met, and which led to the latest approval, had been the return of political stability.
But the disbursement of the remaining $250 million would again depend on meeting more criteria linked to corporate governance.
Some of these criteria, he said, concerned state firms' accounting practices or the selection of their board of commissioners.
Another condition is for the government to increase the number of privatized state firms, he added.
Heeswijk said the other $250 million would likely come in the form of two more bonds, or tranches, spanning another one to two years.
The ADB's $600 million loan program should help finance various programs covering financial reforms, community development, electricity and industrial competitiveness and the development of small and medium-sized enterprises.
But they are also tied to conditions such as the deliberation of new laws concerning money laundering and investment.
The government uses foreign loans to finance this year's state budget, which could reach some Rp 54.7 trillion (about $5.2 billion). Of this amount, foreign loan are expected to contribute some Rp 19.93 trillion to this year's deficit financing.
The government will cover the remainder with proceeds from its privatization program, and the Indonesian Bank Restructuring Agency's (IBRA) asset sales.