CGI to meet on US$5b loan for Indonesia

JAKARTA (JP): Indonesia's major donors pooled under the Consultative Group on Indonesia (CGI) are set to provide the country with US$5 billion in loans at the upcoming donors meeting, according to a senior government official.

Deputy for international cooperation at the National Development Planning Board (Bappenas) Budhi Tjahjati said on Friday the World Bank, the Asian Development Bank, the Islamic Development Bank and seven bilateral donors had expressed readiness to provide the loans during initial talks with the government.

"But this is not a pledge," she said, pointing out that the commitment would only be made at the upcoming July 27-July 28 CGI meeting in Paris.

Budhi said in addition to the World Bank, Asian Development Bank, Islamic Development Bank, Japan, Australia, Spain and Germany who had expressed their readiness to provide a total of $4.72 billion, Italy, Denmark and New Zealand would follow suit later.

"After we count it, the loan figure could reach $5 billion," she said.

The World Bank, the Asian Development Bank and the Islamic Development Bank told the government earlier they were prepared to respectively provide $1.5 billion, $1.2 billion and $200 million.

Budhi added, however, the government had yet to decide on how much it would ask from the donors.

She also said the CGI meeting would proceed despite calls for a delay to wait until a new government was formed.

She explained that among the topics on the meeting's agenda were the country's current condition, how to proceed with the economic reform programs, the country's long-term development program and special themes such as the issue of good governance.

Budhi also said the government had decided to return two project loans from the Asian Development Bank because the projects were terminated.

She said these were the industry, technology and human resources development project worth $50 million, and a project for the development of Belawan, Banjarmasin and Balikpapan ports.

She could not come up with the loan size for the second project, or why it was terminated.

She said the government had to return the loans in order to avoid paying an administration fee of 1 percent.

"We have to be responsible with our loan management. It is a sin to our next generation if we aren't" she said.

Budhi said 10 other projects, also financed by loans from the Asian Development Bank, were still being reviewed to see whether they would proceed or not.

She said project loans from other donors would also be reviewed.

Last year Indonesia returned some $949 million in project loans for 69 projects to the Asian Development Banks, and some $1 billion for 71 to the World Bank.(rei)