RI absorbs only 30% of IDB's loan

The Jakarta Post, Jakarta

Indonesia has absorbed only 30 percent of loans extended by the Islamic Development Bank (IDB) this year mainly due to problems related to regional autonomy, a senior official with the international institution said on Monday.

IDB representative for Indonesia Charmeida Tjokrosuwarno said the government and the private sector could only absorb US$150 million, or about 30 percent of the $500 million in loans the bank had extended.

Charmeida said out of the $500 million, $200 million was allocated for government projects and $300 million for the private sector.

The slow absorption was due to difficulties faced by projects in the regions, he said on the sidelines of the opening ceremony for the Organization of the Islamic Conference (OIC) three-week trade policy course. He did not elaborate.

This year, the IDB had funded trading activities conducted by state oil and gas company PT Pertamina, steel mill company PT Krakatau Steel and chemical manufacturer PT Petrokimia, as well as numerous health and education projects, he said.

Charmeida said the IDB planned to extend the same amount of loans next year but was open to the possibility of increasing their size.

Among planned projects to be funded by IDB loans include the purchase of three patrol ships worth more than $20 million for the Custom and Excise office and the construction of a monorail and toll roads, he said.