JBIC pledges cheap loans for railway project

The Jakarta Post, Jakarta

The Japan Bank for International Cooperation (JBIC) agreed on Thursday to provide Indonesia with cheap loans amounting to 48.70 billion yen (about US$386.51 million) for education and railway projects.

JBIC said in a press statement that the agreement for the two overseas development assistance loans were signed in Tokyo by Indonesia Ambassador in Tokyo Soemadi Djoko Moerdjono Brotodiningrat and JBIC governor Kyosuke Shinozawa.

The statement said that 7.67 billion yen would be used for the Maritime Education and Training Improvement project. The loan will be provided in the form of "goods and services" and "consultancy services" each carrying an interest rate of 0.75 percent with a repayment period of 40 years plus a grace period of 10 years.

The remainder, 41.03 billion yen, would go toward financing the railway electrification and double-double tracking of the Java Main Line Project. This loan has similar conditions as the above except it carries a higher interest rate of 0.95 percent.

The signing of the loan agreement followed similar pledges made on Wednesday by the World Bank, Asian Development Bank, and Germany's Kreditstanstalt fuer Wiederaufbau in loans and grants worth some $228.6 million.

JBIC said that the first project was aimed at improving maritime education and training programs in Indonesia to meet international standards.

"The country is the world's largest archipelago and second largest supplier of seafarers after the Philippines," the bank said.

The railway project on the so-called Bekasi Line is aimed at installing additional double tracks to separate long-distance and commuter traffic and to electrify the extension of suburban rail lines to meet the needs of expanding commuting areas.