World Bank gives Indonesia $124 million in loans

JAKARTA (JP): The Washington-based World Bank approved on Wednesday two loans totaling US$123.9 million for the development of higher education and farming on reclaimed swampland.

The World Bank office here said yesterday that $58.9 million of the loans would be used to improve higher education in anticipation of a higher demand for graduate education.

The bank noted that graduate education and university research deserve special attention as part of an overall public investment strategy in higher education.

The other $65 million of the loan funds will finance the program to improve the productivity of already reclaimed swampland for farming.

The project aims not only to alleviate poverty but also to assist the Indonesian government in managing part of the coastal zones and to ensure that future swamp development proceeds only with full regard to sound environmental practices, the bank added.

The main elements of the project which will cost a total of $106 million include the improvement of water management, specific agricultural research and extension program, cultivation of coconuts and road and water transport.

Both loans are repayable within 20 years, including five years of grace period, and are subject to the bank's variable interest rate which is currently 7.27 percent a year. (vin)