JBIC provides $375m loan for RI rural projects

JAKARTA (JP): The Japan Bank for International Cooperation (JBIC) signed on Thursday a 46.35 billion yen (US$375.5 million) loan agreement with the Indonesian government to finance several rural projects in Sumatra, Java and Kalimantan.

The agreement was signed by the Ministry of Finance's Director General of the Budget Anshari Ritonga and JBIC's chief representative in Jakarta Nobuo Hazeyama.

JBIC said in a statement that some 7.64 billion yen of the soft loan would be used to finance the Second Batang Hari Irrigation Project in West Sumatra and Jambi provinces, and 18.68 billion yen would be allocated to the Second Water Resources Development Project in West Sumatra, Java and Kalimantan.

Both projects are aimed at boosting food production in the regions, according to the statement.

The remaining 20.04 billion yen has been allocated to the Third Rural Areas Infrastructure Development Project, designed to improve basic infrastructure such as roads, bridges and sanitation facilities in rural areas. The bank did not specify the areas targeted for this project.

It said the three projects were an extension of previous projects it had also financed.

"The three loans are provided for projects that will contribute to laying foundations for the medium and long-term development of Indonesia, thus helping the country to achieve sustainable growth," JBIC said.

The loans will be provided in the form of "goods and services" and "consultancy services".

Goods and services carry an interest rate of 1.80 percent, with a repayment period of 30 years and a grace period of 10 years.

Consulting services carry an interest rate of 0.75 percent and should be repaid in 40 years with a grace period of 10 years, the bank said.

JBIC said the National Development Planning Board (Bappenas) would be responsible for the projects.

The Second Batang Hari Irrigation Project would be jointly executed by the Ministry of Resettlement and Infrastructure and the Ministry of Agriculture, while the Second Water Resources Development Project would be overseen by the Ministry of Resettlement and Infrastructure, the bank said.

The Third Rural Areas Infrastructure Project would be jointly executed by the Ministry of Resettlement and Infrastructure and the Ministry of Home Affairs and Regional Autonomy.(05)