Tadashi Maeda, Executive Managing Director for JBIC.

JAKARTA (TheInsiderStories) – The Japan Bank for International Corporation (JBIC) pledges its commitment to support Indonesia’s infrastructure projects particularly in transportation and urban development, shifting its previous priority in energy finance.

In his visit to the Indonesia Maritime Affair Coordinating Ministry Office today Monday (12/3), Executive Managing Director JBIC Tadashi Maeda, outlined that the Japanese government will support Indonesia to explore new mechanism in financing, including for the Jakarta-Surabaya High Speed Train project.

The Japanese government acknowledges President Joko Widodo’s focus on the development of infrastructure in all sectors, the primary objective being to achieve economic growth of at least 7 per cent, so Indonesia can reach the status of a so-called “designated country” by 2025, exceeding its current status as a “developing country”.

“We discussed the new mechanism of providing finance to infrastructure, because so many needs in Indonesia’s infrastructure, but you have constraints in the Budget,” he said Monday (12/3), adding the meeting is a follow-up agenda with Indonesia Maritime Affair Coordinating Minister Luhut Pandjaitan in Davos a few months ago.

The project aims to increase the speed of the rail connecting the two cities, from around 90 kilometers per hour to 160 kilometers per hour. The government is also still considering the technology that will power the trains: diesel, which will cost Rp 30 trillion (US$2.2 billion), or electricity with its Rp 80 trillion price tag.

Japan previously lost to China in the high-speed railway connecting Jakarta and Bandung, West Java. Regarding the amount of investment prepared by JBIC, Maeda said it has an abundant budget. He promised the entire Japanese government is ready to assist Indonesia in this project.

“In this project, we do not only offer loan, but also some advise, how we can make the project attractive for potential investors from the private sector,” he said.

One of the last JCIB projects in Indonesia is infrastructure funding for the Cirebon steam power plant (PLTU) expansion Unit II built by the Cirebon Power consortium in May 2017.The Loan Agreement is worth US $ 1.74 billion or more than Rp 23 trillion. This project faced a lawsuit for dismissal of environmental permits.

Written by Elisa Valenta, elisa.valenta@theinsiderstories.com