Japan, IMF and WB extend new loans to RI
JAKARTA (JP): The Export-Import Bank of Japan agreed on Friday to extend 210 billion yen (US$1.4 billion) to Indonesia, while the International Monetary Fund offered another $1 billion to help with the rehabilitation and restructuring of the country's devastated economy.
The World Bank also announced on Friday a $31.5 million technical assistance loan to help the government with its corporate restructuring program.
The director general of Japan Exim Bank's loan department for Asia and Oceania, Hatano, and Indonesian Finance Minister Bambang Subianto signed the loan agreement here.
The bank said in a statement that the loan was part of the $2.4 billion equivalent aid package to Indonesia under the New Miyazawa Initiative, announced in Japan in February.
Some $1 billion (150 billion yen) of the loan was a parallel loan with the IMF's Extended Fund Facility, which was intended to support the economic rehabilitation of the crisis-hit country through macroeconomic stabilization and financial and corporate reforms, it explained.
The bank added that another $400 million (60 billion yen) was a loan co-financed by the Asian Development Bank's power sector restructuring program.
"This untied loan is designed to establish a competitive market for electricity and ensure the financial viability of the state-owned electricity company PT Perusahaan Listrik Negara, with the aim of restructuring the power sector and improving efficiency," it said.
Mas Widjaja, director of overseas funding at the Ministry of Finance, said $500 million of the loans was expected to be disbursed before the end of March.
He said the disbursement of the remaining amount would depend on whether the government could implement "certain economic reform programs".
He added that the disbursement of half of the power sector restructuring loan would depend on whether the government increased the electricity tariff in October as promised.
The ADB provided PLN with $200 million in restructuring loans on March 25.
Meanwhile, IMF's first managing director Stanley Fischer said in a statement from Washington on Thursday that the fund's executive board had approved Indonesia's request to increase its existing US$11.3 billion loan facility by a further $1 billion.
Fischer said Indonesia would receive $460 million immediately, bringing total payments to $9.3 billion since the IMF first approved a massive loan in November 1997. Indonesia could receive an additional $3 billion by November 2000.
"With the implementation of key structural reforms, further consolidation of macroeconomic stability, and the additional official external financing that has been committed by Japan, the World Bank, and the ADB as well as by the IMF, an upturn in economic activity could commence in the second half of this calendar year," he said.
The World Bank said in a statement that the approved $31.5 million technical assistance loan was designed to help the government support the corporate restructuring activities of Bank Indonesia and the Indonesian Debt Restructuring Agency, and to enhance the work of the Jakarta Initiative Task Force in facilitating and accelerating debt and overall corporate restructuring.
The bank added that over 125 companies and their creditors with aggregate external debts of over $17 billion have begun to use the Jakarta Initiative's facilities. (rei/rid)