New Yen Loan to Indonesia for FY2004

January 19, 2005

The Government of Japan has decided to extend a new yen loan of up to 114.829 billion yen in total to the Government of the Republic of Indonesia in FY2004 for the following ten projects including a development policy loan and projects to improve electricity supply and roads.

(1)	Lower Solo River Improvement Project Phase-II (up to 9,345 million yen)
(2)	Komering Irrigation Project Stage II, Phase 2 (up to 13.79 billion yen)
(3)	Integrated Sediment Disaster Mitigation Management of Mt. Merapi and Progo River Basin for Regional Development Project, and Urgent Measures Against Large Scale Lands Collapse on Mt. Bawakaraeng (up to 16.436 billion yen)
(4)	Ulubelu Geothermanl Power Plant Project (up to 20.288 billion yen)
(5)	Asahan No. 3 Hydroelectric Power Plant Construction Project (up to 864 million yen)
(6)	Keramasan Power Plant Extension Project (up to 9,736 million yen)
(7)	North Java Corridor Flyover Project (up to 4,287 million yen)
(8)	Tanjung Priok Access Road Construction Project (1) (up to 26.306 billion yen)
(9)	Development of Faculty of Medicine and Health Sciences of Syarif Hidayatullah State Islamic University (up to 2,983 million yen)
(10)	Development Policy Loan (up to 10.794 billion yen)

In order for Indonesia to achieve sustainable economic growth, Japan considers it necessary to strengthen Indonesia's fiscal sustainability and at the same time its international competitiveness. From such a viewpoint, Japan attaches high importance to a yen loan on the projects pertaining to the economic infrastructure, which should help improve the investment environment of Indonesia. The projects for which the yen loan have been decided this time will be mainly centered on the improvement of the economic infrastructure.
The development policy loan, on the other hand, will be extended as a co-financing loan for the development policy assistance loan of the World Bank, with a view to assisting proactively the endeavors of the Government of Indonesia to reform its economy, such as by the improvement of the investment environment.
The decision on the new yen loan will be announced by the representative of the Government of Japan at the 14th Consultative Group Meeting on Indonesia to be held in Jakarta on January 20.
The Government of Japan intends to study in the future the utilization of its yen loan as assistance for rehabilitation and reconstruction process for the disasters caused by the major earthquake off the coast of Sumatra and subsequent tunamis, taking fully into account the results of the needs assessment to be conducted by such organization as the World Bank and the intentions of the disaster-affected countries including Indonesia.

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