Riau plans massive bond issue

Riau plans massive bond issue

The Jakarta Post, Jakarta

Oil-rich Riau province plans to issue bonds this year to boost
its financial capability as it is seeking to speed up economic
development to bring its people out of poverty.

"This is because our original financial capacity is not yet
sufficient. The amount (of the bond) is still being calculated,
but most likely it will be in the trillions (rupiah)," governor
Mohammad Rusli Zainal told reporters on Friday.

Part of the proceeds would go for the province's
infrastructure development, but most would be allocated for
education, the governor said.

"At the moment, some 67 percent of our budget is used for
education and our poverty alleviation program, which shows how
important we regard education for the province's future."

He noted that education was crucial for the province, which
despite its abundant oil resources is considered among the
country's poorest. About 5.5 million workers in the province are
either elementary school drop-outs or have never gone to school.

It remains unclear whether the central government has given
the go-ahead to such a plan. According to existing regulations,
local government has to secure the central government's consent
before seeking alternative funding sources -- aside from its
local revenue.

Rusli added the province was also considering seeking soft
loans and was building cooperation with some countries to help
finance a number of development projects in the province.