JAKARTA (TheInsiderStories) - Indonesia and Japan have signed a bilateral loan agreement worth ¥140.051 billion ($1.14 billion) to support several infrastructure and energy projects in this country until 2019 , The Jakarta Post reported.
The deal followed up Japanese Prime Minister Shinzo Abe’s announcement about the proposed assistance during President Joko Widodo’s visit to Japan in March.
Part of the loan will allocated to support the development of Jakarta’s Mass Rapid Transit (MRT) system and an electricity transmission network.
The agreement signed by Japanese Ambassador for Indonesia Yasuaki Tanizaki and the Foreign Ministry’s director general for the Asia-Pacific and Africa, Yuri O. Thamrin.
Half of the fund ¥75.2 billion will allocated for developing of the next phase of the MRT for the Hotel Indonesia traffic circle in Central Jakarta to Kampung Bandan in North Jakarta.
Currently, construction work is ongoing for the first phase of the north-south line from Lebak Bulus in South Jakarta to the traffic circle. The construction is expected to be finished in 2018.
Another 1.919 billion Yen will be used to develop phase one of the Jakarta MRT’s east-west route, from Kampung Melayu in East Jakarta to the Hotel Indonesia traffic circle.
“In accordance with the wishes of Prime Minister Shinzo Abe, Japan will continue to expand and stand by its commitment to help develop infrastructure in Indonesia,” The Japanese Embassy’s economic counsellor, Takuro Tasaka said.
He adding, Japanese companies Shimizu Corp., Tokyu Corp., Obayashi Corp. and Sumitomo Mitsui Corp. are among those involved in the construction of the Jakarta MRT.
Underground drilling for the project began in September. Also in September, MRT Jakarta president director Dono Boestami said that 43 percent of the underground construction has been completed and 18 percent of the above ground construction is finished.
Aside from the MRT project, a portion of the loan will be used for the construction of a transmission system that will deliver electricity between Java and Sumatra.
Up to ¥62.9 billion will be spent on the project, which will also involve the construction of an electricity transmission station and an AC/DC converter station.
Tasaka added that parts of the electricity project are still currently in the tendering process, but a contractor has already been found to work on it.
Each of the three loans come with their own conditions: the one for the east west Jakarta MRT project is subject to interest of 0.01 percent per year with a 25-year return period, while loan for the second phase of the north-south line carries an interest of 0.1 percent a year with a tied return period of 40 years. The electricity project loan carries an interest of 1.4 percent per year with a return period of 25 years. (*)