Jakarta, 28 March 2006
Japan to Provide New Yen Loan Assistance to Indonesia
[Bahasa Indonesia]
1. The Government of Japan has decided to provide new Yen Loan assistance to the Government of the Republic of Indonesia, totaling up to ￥93.005 billion (approximately US$ 796 million or Rp 7.235 trillion) for five projects of up to \ 81.276 billion and the Second Development Policy Loan (program loan) of up to \ 11.729 billion in order to support its efforts for economic and social development.
Notes to this effect are exchanged on March 28 in Jakarta between Mr. Masafumi Kuroki, Charge d’Affaires ad interim of Japan to the Republic of Indonesia, and H.E. Mr. Primo Alui Joelianto, Director General for Asia Pacific and African Affairs, Department of Foreign Affairs of the Republic of Indonesia.
The project/program titles and maximum amounts are as follows;
(1) “Tanjung Priok Access Road Construction Project (II)”
(￥26.62 billion, approximately US$ 228 million or Rp 2.071 trillion)
(2) “Asahan No.3 Hydroelectric Power Plant Construction Project”
(￥27.642 billion, approximately US$ 237 million or Rp 2.150 trillion)
(3) “Kamojang Geothermal Power Plant Extension Project (Engineering Services)”
(￥995 million, approximately US$ 9 million or Rp 77 billion)
(4) “Integrated Water Resources and Flood Management Project for Semarang”
(￥16.302 billion, approximately US$ 140 million or Rp 1.268 trillion)
(5) “Professional Human Resource Development Project (III)”
(￥9.717 billion, approximately US$ 83 million or Rp 756 billion)
(6) “The Second Development Policy Loan”
(￥11.729 billion, approximately US$ 100 million or Rp 912 billion)
2. The outlines of the five projects and one program are as follows ;
(1) Tanjung Priok Access Road Construction Project (II)
This project is to construct the access road between the Jakarta Outer Ring Road and Tanjung Priok Port in order to improve the traffic condition connecting suburbs of Jakarta city and Tanjung Priok Port.
(2) Asahan No.3 Hydroelectric Power Plant Construction Project
This project is to construct the run of river type hydroelectric power plant (maximum capacity: 77MW×2) and interconnecting transmission line in Asahan Regency, North Sumatera Province, in order to improve the tight supply-demand situation and stability of power supply in North Sumatera grid.
(3) Kamojang Geothermal Power Plant Extension Project (Engineering Services)
This project is to prepare a detail design for the new geothermal power plant (maximum capacity increase: 60MW) in existing Kamojang Geothermal Power Plant Site, West Java Province.
(4) Integrated Water Resources and Flood Management Project for Semarang
This project is to improve the river and divergent and to construct the multi-purpose dam in order to mitigate the flood disaster and to supply water constantly in Semarang, Middle Java province.
(5) Professional Human Resource Development Project (III)
This is the project for developing human resources equipped with advanced knowledge and skills in such fields as public policy, finance by providing degree courses and trainings in Japan and Indonesia for civil servants engaging in policy planning or finance at the central and local governments.
(6) The Second Development Policy Loan
This loan aims to support reform efforts of the Government of Republic of Indonesia including the areas of macroeconomic stability and governance in the form of co-financing with the International Bank for Reconstruction and Development (IBRD) and Asian Development Bank (ADB).
3. Loan conditions are as follows;
For project (1)
i) Annual interest rate: 0.4% (condition of using Japan’s technology)
ii) Repayment period: 40 years (including grace period of 10 years)
For projects (2) and (3)
i) Annual interest rate: 0.75% (preferential condition because of alternative energy source field)
ii) Repayment period: 40 years (including grace period of 10 years)
For projects (4) and (6)
i) Annual interest rate: 1.5% (general condition)
ii) Repayment period: 30 years (including grace period of 10 years)
For project (5)
i) Annual interest rate: 0.75% (preferential condition because of human resource development support field)
ii) Repayment period: 40 years (including grace period of 10 years)
4. Through these projects and program, it is expected that the improvement of the investment climate and the enhancement of human resource development in Indonesia as well as the stabilization of macro economy and the governance reform by the Government of Indonesia will be achieved..
5. With this exchange of notes, the aggregate of agreed Japan’s Yen Loan to the Republic of Indonesia amounts ￥4.026 trillion (approximately US$ 34.462 billion or Rp 313.178 trillion).
(Note)
The Second Development Policy Loan
IBRD and ADB extended the Second Development Policy Loan in the amount of 400 million US$ and 200 million US$ respectively in December, 2005 to support the Government of Republic of Indonesia’s efforts to sustain macroeconomic stability and accelerate the momentum of economic policy reform. | 
