CGI to meet on US$5b loan for Indonesia

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)