Two agricultural projects confirmed

The Jakarta Post Jakarta

A recent trip by a government delegation to the Middle East appears to be bearing fruit as the Islamic Development Bank (IDB) has confirmed it will provide financing of up to US$130 million (some Rp 1.2 trillion) for the development of two irrigation projects here.

The Ministry of Agriculture's director general for agricultural infrastructure, Ato Suprapto, said during a hearing with legislators late on Wednesday that the financing, in the form of soft loans, could be disbursed by the end of the year.

The two projects consist of the $50 million rehabilitation of the irrigation scheme in Jatiluhur, West Java, and the $80 million development of a reservoir to mitigate the effects of drought along the north coast of Java.

The two schemes are part of 10 agricultural projects worth $1.57 billion that were put on the table during a recent trip to the region by a government delegation led by Minister of Agriculture Anton Apriyantono.

Anton said that financial support from external sources was needed because of the country's limited self-financing capability.

"Of the 10 projects we proposed, these are the ones that have been confirmed by the IDB," said Ato.

Ato added that although the details were still being worked out with the IDB, the soft loans could carry interest rates as low as less than 1 percent per annum over 12-year terms.

Ato said that financing for the eight remaining projects was being sought from the Kuwait Development Fund and the Saudi Development Fund.

He added that the Saudi Development Fund had pledged a separate soft loan of about $50 million for infrastructure and agriculture rehabilitation projects in tsunami-devastated Aceh. (002)