China agrees to add $200m in loans: Jusuf

China agrees to add $200m in loans: Jusuf

The Jakarta Post, Jakarta

Following up the recently signed Sino-Indonesian strategic
partnership agreement, China has agreed to increase its financial
aid to Indonesia, adding another US$200 million in loans to
finance major infrastructure projects in the country, the finance
minister says.

Minister of Finance Jusuf Anwar said the additional bilateral
loans would come on top of the $400 million that China had
already committed to Indonesia. Chinese businesses in the
world's rising economic superpower had also expressed their
intention to increase their investments here, he said.

Explaining the results of his meeting with several top Chinese
officials during the Asia-Europe Meeting (ASEM) last week in
Beijing, Jusuf said on Tuesday that the Chinese government had
expressed its willingness to implement soon a memorandum of
understanding (MOU) on financial cooperation that both countries
recently inked.

"With the commitment of the funds, we can start carrying out
the already-planned financial and technical studies of several
infrastructure projects," he said.

President Susilo Bambang Yudhoyono signed a strategic
partnership agreement with Chinese President Hu Jintao following
the Asian-African Conference in April here, to help expand
bilateral trade between the largest Muslim nation and the world's
most-populated country from $14 billion to some $20 billion
during the next three years. Included in the agreement was an MOU
on financial, infrastructure and natural resource cooperation.

"China is now one of the world's largest economies," Jusuf
said. "We therefore have to grab any opportunity to increase our
cooperation with them."

He said the new loans would be used to help finance three
major infrastructure projects in the country -- the construction
of a $94 million, 110-megawatt Parit Baru power plant in West
Kalimantan, the completion of the $169 million Jatigede dam in
West Java and the completion of a $85 million double-track
railway from Cirebon, West Java, to Kroya, Central Java.

China had previously helped finance the railway's
construction, as part of its $400 million commitment in soft
loans to Indonesia. More loans were used to help finance the
construction of the $160 million Suramadu bridge in East Java and
the $155 million Labuan Angin power plant in North Sumatra. The
soft loans from China carry an interest of 3 percent, with a 15-
year term and a grace period of seven years.

Jusuf said China businesses representatives had expressed
their intention to increase their investments in the country.

"A delegation of 30 Chinese business representatives is
expected to visit Indonesia soon," he said. "During their visit,
we will explain all the investment opportunities available in
Indonesia."

Coordinating Minister for the Economy Aburizal Bakrie
previously suggested Chinese businesses invest in Indonesia's
agricultural, energy and mining sectors, along with
infrastructure development projects, which the government will be
offering this year.