Japan offers RI loans to fight climate change

Adianto P. Simamora ,  The Jakarta Post ,  Jakarta   |  Fri, 05/16/2008 12:50 PM  |  National

More countries have pledged financial assistance to Indonesia to help fight impacts of climate change, citing the Southeast Asian country's vulnerability to global warming.

Nikkei economic daily reported that Japan was to extend 20-30 billion yen worth of low-interest loans to Indonesia over the next five years.

"The money will go to environmental protection, including our combat against climate change. We still are discussing it with the Japanese government," State Minister for the Environment Rachmat Witoelar told The Jakarta Post on Thursday.

Rachmat is to visit Japan next week to attend a conference on the future environment of Asia. Environment ministers from Japan and South Korea are scheduled to speak at the discussion.

"I will meet with Japanese officials to follow up the promise on the sidelines of the conference," Rachmat said.

Japan said it planned to provide up to 500 billion yen (US$4.8 billion) worth of loans to help developing countries fight global warming, AFP reported.

The first batch of new loans would go to Indonesia. Nigeria and Guyana are also candidates for aid.

The new yen loans would carry annual interest rates of 0.4 to 0.5 percent, far lower than the already low interest rates of some 1.0 to 1.2 percent now charged on 40-year loans provided by Japan.

The loans would be used to finance alternative energy projects such as wind and solar power generation, the installation of energy-saving equipment at power plants and forestation projects.

Many developed countries have offered Indonesia assistance to adapt to and mitigate climate change since the UN climate change conference in Bali last December.

Australia offered $30 million in grants to Indonesia to reduce greenhouse gas emissions from deforestation in Kalimantan.

The United States announced a $2.8 million grant to support Indonesia to protect biodiversity and combat climate change.

Forestry Minister Malam Sambat Ka'ban said his office had received about $100 million in grants from the international community to stop deforestation. The money will be distributed to regions eligible for pilot projects as part of the reduction of emissions from deforestation and degradation (REDD) initiative.

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