Germany to provide US$66m soft loan for Jakarta train service
Germany to provide US$66m soft loan for Jakarta train service
Urip Hudiono, The Jakarta Post, Jakarta
The German government plans to provide 52 million euros (US$66
million) in loans and grants for the improvement of commuter
train services in Greater Jakarta.
The funds, provided through the German Development Bank (KfW),
will be used to finance the assembly of 10 trains and their
engines, and is expected to be agreed upon in December.
"The trains will be built in Indonesia, with technical
assistance from Germany," KfW senior vice president for Asia and
Europe, Norbert Kloppenburg, said on Monday, after the signing of
two debt swap agreements between Indonesia and Germany.
Director of KfW's Jakarta office, Jens Clausen, explained that
the funds will be in the form of a 51 million euro soft loan with
an interest rate of 1.3 percent per year, for the assembly of the
trains at state-owned PT Inka in Madiun, East Java, as well as
for the rehabilitation and maintenance of Jakarta's railway
system.
"Another one million euros will be in the form of a grant, for
the training of railway personnel," Clausen said, adding that the
project was important in view of the need for a better mass rapid
transportation system.
Meanwhile, of the debt swap agreements, the German government
has signed a commitment to write off 23 million euros of
Indonesia's debt. In exchange the Indonesian government is
required to build 100 junior high schools in 10 provinces of
eastern Indonesia where school enrollment is below 70 percent.
The debt will be written off upon completion of the schools.
Another debt swap deal, leading to the cancellation of 25
million euros in debts, will be for proposed projects in natural
resource protection and industrial pollution control.
Germany had previously canceled 25.6 million euros in debts
through a debt swap deal as well, from a total of some 1 billion
euros Indonesia owes.
Minister of Finance Yusuf Anwar, who witnessed the signing,
said that the government would continue negotiating similar debt
swap schemes with other countries.
"The schemes are in line with the government's goal of
alleviating poverty, and is one of the most feasible ways of
financing our debts," he said.
Deputy for the Coordinating Minister for Economic Affairs,
Jannes Hutagalung, explained that the government would soon sign
other debt swap agreements with the governments of the United
Kingdom (UK), France and Italy.
"The Netherlands has also shown an interest in a debt swap
scheme with us," he said.
Data from the National Planning Agency (Bappenas) shows a debt
write-off potential of $156.1 million with the UK, $262.5 million
with France and $38 million with Italy, through debt swap
schemes.
Ministry of Finance Director General for State Treasury Mulia
Nasution recently said that the government had been negotiating
with the British government on a debt swap deal worth Rp 644
billion (US$71 million), under which the Indonesian government
must provide some 1,000 buses for public transportation in
Jakarta in exchange for a debt cut.