Japan, IMF and WB extend new loans to RI

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)