Japan Gives Loans Of IDR 9.35 Trillion For Two Projects In Indonesia

Japanese currency illustration, yen. (ANTARA)

JAKARTA - Japan and Indonesia have signed and exchanged notes related to two yen loan projects totaling up to 90.456 billion yen (around Rp9.35 trillion) which will be used to sign two projects in the country.

The signing of the loan note was carried out by the Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of Indonesia Yasushi Masaki and the Director General of Asia-Pacific and Africa, Ministry of Foreign Affairs of the Republic of Indonesia, Abdul Kadir Jailani, said a press statement from the Ministry of Foreign Affairs of Japan received in Jakarta on Saturday.

Funding of 7.048 billion yen (Rp728.7 billion) will be used for management strengthening and development projects.

This project aims to encourage proper management and develop the capacity of administrative officials in Indonesia and increase the capacity of central and regional government organizations in Indonesia.

"Thus, contributing to the achievement of development priority goals as well as the development of sustainable human resource exchanges between Japan and Indonesia," explained the Japanese ministry.

The loan provision is an interest rate of 1.45 percent per year with 0.2 percent per year for consulting services. Meanwhile, the payment period is 25 years which has covered a grace period of 7 years with the provision that procurement is not included.

The second project to be financed is the Patimban Port (III) development project located in Subang Regency, West Java.

Funding of 83.408 billion yen (Rp8.62 trillion) aims to strengthen logistics functions in the metropolitan area of Jakarta by building a new port (terminal container, car terminal, etc.) in Patimban.

This is expected to contribute to Indonesia's economic growth by increasing the investment environment.

The interest rate that applies to this second project is 0.3 percent per year with a consultation service of 0.2 oersen per year.

The payment period is 40 years which includes a grace period of 10 years with the provisions of bound procurement.

The loan is a form of cooperation to provide loans to developing countries with mild conditions (low interest rates and long payment periods) to finance infrastructure development and other necessary needs.

For developing countries, because these funds must be paid to Japan, it is hoped that this can encourage effective utilization and self-developed development.