Business

ADB allocates $1.75b to
Indonesia

The Asian Development Bank (ADB) is set to provide a total of US$1.75 billion in loans to help Indonesia strengthen its fiscal management amid the threats of the global financial crisis.

"We are ready to support Indonesia with another $1 billion in loans on top of the already allocated $750 million," ADB President Haruhiko Kuroda said after a meeting with Finance Minister Sri Mulyani Indrawati in Jakarta on Monday.

ADB Executive Director Ceppie K. Sumadilaga said the $750 million in project loans had been prepared and committed to provide the remaining $1 billion, $500 million of which will come in the form of program loans and $500 million as standby loans.

Asked when the loans will be disbursed, he said it "will depend on Indonesia's needs". The tenure is between 17 years and 20 years, while the interest rate is LIBOR plus 0.5 percent.

Finance Minister Sri Mulyani Indrawati said the $1.75 billion in loans would help Indonesia make counter-cyclical measures. "Our source of financing has become secured with ADB loans."

The government has set the 2009 budget deficit at Rp 129.5 trillion, or 2.5 percent of the GDP.

Mulyani said earlier several multilateral agencies and countries had provided $6 billion in standby loans for Indonesia. The World Bank provides $2 billion, the ADB $1 billion, the Islamic
Development Bank between $500 million and $1 billion, Japan $1 billion and Australia $1 billion.
 

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