PGN hopeful of soft loan from Japan
PGN hopeful of soft loan from Japan
JAKARTA (JP): State gas distribution company PT Perusahaan Gas
Negara (PGN) expects Japan to rule next month on its application
for a US$722.5 million soft loan to finance the construction of a
pipeline from Sumatra to West Java.
PGN president Abdul Qoyum Tjandranegara said on Monday
representatives from the Japanese government would arrive in
Jakarta this week to conduct final checks.
The Japanese loan would account for 85 percent of the $850
million initial investment for the project, with PGN coming up
with the remaining 15 percent, Qoyum said after a ceremony during
which the company received an International Standard Organization
(ISO) 9002 certificate.
The certificate, from Lloyd's Register Quality Assurance of
Britain, was given in recognition of PGN's control management at
its head office in Jakarta and at its four branch offices in
Medan, Bogor, Cirebon and Surabaya.
The Japanese loan would come from a consortium that likely
would include Sumitomo and Mitsubishi, Qoyum said.
The loan, if approved, would be part of a special package
offered by Japan's Overseas Economic Cooperation Fund (OECF) for
Southeast Asian countries. It would have a 40 year-maturity
period and carry an interest rate of 1 percent per annum.
Indonesia also is seeking OECF loans for the construction of a
mass-rapid transportation project in Jakarta and a double-track
railway project connecting Jakarta and Surabaya, according to
reports.
PGN also would involve local companies PT Citra Panjimas Loka
and PT Krakatau Steel in funding the pipeline project, Qoyum
said.
"The project is very important for PGN because the pipeline
will accelerate the distribution of 600 million cubic feet of gas
per day from its sources in Sumatra to its market, mostly
industries in West Java," he said.
PGN's next major project will be to build a pipeline
connecting gas fields in East Kalimantan with East Java, he said.
Funding for the project, expected to cost $1 billion, will
come from a European consortium, including companies from France,
the Netherlands and Italy, he said. (02)