Japanese to aid Indonesia's export financing agency

Japanese to aid Indonesia's export financing agency

TOKYO (JP): The Export-Import Bank of Japan (JEXIM) has
pledged to find more sources to help finance Indonesia's Export
Financing Agency, Minister of Industry and Trade Rahardi Ramelan
said on Monday.

"We have secured US$1 billion in a standing loan from JEXIM.
However, they told me they want to seek more financial sources to
help finance the agency's operations," he said following a
meeting with JEXIM executives here on Monday.

Rahardi, who is leading a trade mission to Japan, said the
Japanese bank wanted to see the agency established as soon as
possible to revive Indonesian exports.

Rahardi told the JEXIM executive that the House of
Representatives had passed a bill last month on the special bank
as a basis for creating an export financing agency.

"The bill is currently waiting for President Habibie's
ratification next week."

He said JEXIM supported the government's decision to form a
new institution to carry out export financing activities, instead
of transforming an existing bank into an export financing body as
initially planned.

"JEXIM said that transforming an existing bank into a
financing agency would be more complicated. However, JEXIM
requires us to report any progress in establishing the agency."

The government earlier planned to convert Bank PDFCI, one of
the four private banks nationalized last year, into an agency of
this kind. It later canceled the plan, saying that establishing a
new entity would be more favorable.

The export financing agency, which would be named the Export
Financing Bank, is designed to provide financial assistance to
Indonesian exporters who have suffered from the collapse of the
local banking industry.

Rahardi said JEXIM questioned the progress of $400 billion
worth of loans used to finance the country's power restructuring
program and the country's private debt restructuring program.

"JEXIM require us to report any progress we reach in
establishing a competitive market for electricity and ensure the
financial viability of the state-owned electricity company PT
PLN.

"The loan is designed to restructure the country's power
sector and improve its efficiency."

Rahardi said half of the loan, which was cofinanced by the
Asian Development Bank, was disbursed to PLN in March.

"The disbursement of the remaining amount will depend on
whether the government increases its electricity tariffs in
October and the progress of PLN's restructuring program."

Rahardi said JEXIM also questioned the continuation of the
restructuring program if there was a change in government after
the June 7 general election.

"So I told them that our country is marching toward a
democratization process. It doesn't matter which party runs the
country -- it will continue our previous commitment." (gis)