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.