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oordinating Economic Minister Hatta Rajasa and Japanese Foreign Minister Seiji Maehara signed here Friday the Memorandum of Cooperation on the development of the Metropolitan Priority Area, worth ¥2 trillion (US$24 billion).

President Susilo Bambang Yudhoyono witnessed the signing ceremony of a deal that will focus on building infrastructure in Jakarta and its surrounding areas.

Hatta explained that Jakarta and surrounding cities (Bogor, Depok, Tangerang and Bekasi) would be prioritized because the metropolitan area has been included in the development program of the economic corridor of Sumatra and Java, the biggest industrial area in Asia.

“This area also shows rapid economic growth, but it still needs more infrastructure development,” Hatta said, adding that the development of the areas would be a pilot project for the development of integrated industrial areas that would also be carried out in Medan, Surabaya and Makassar.

The development would include transportation infrastructure such as the construction of a road, electricity generator, airport and seaport, as well as the supply of clean water.

A technical team is to be established to design a master plan for the MPA development, which is expected to complete by the end of 2011. The feasibility study is targeted to complete in 2012 before the project commences in 2013.

“Financing schemes for this project would combine a public-private partnership, foreign direct investment from Japan, a soft loan, as well as support from Indonesia’s and Japan’s private sectors,” Hatta said, adding that the total value for this project had not been determined.

The project would be carried out in two phases, with the first one from this year to 2014 and the second one from 2014 to 2020.

Japan also has agreed to disburse another $99 million loans to Indonesia to support the improvement of investment climate policy, state budget and poverty eradication.

Indonesian Foreign Minister Marty Natalegawa and Maehara on Friday signed the exchange of notes on the Development Policy Loan during the bilateral consultation held on the sidelines of the third Bali Democracy Forum (BDF).

Both ministers expressed their common views on the importance of strengthening bilateral economic cooperation based on a “Strategic Partnership for the Prosperous Future” and the frame work of the “Indonesia-Japan Economic Partnership Agreement”.

“Both of us shared views on economics, investment, infrastructure and financial cooperation as well as a climate mitigation program of the two countries,” Marty said.

Marty also conveyed his appreciation and gratitude for the presence of Maehara at the BDF.

“The presence of Foreign Minister Seiji Maehara in this year’s forum, as well as former Prime Minister Yukio Hatoyama in the 2009 BDF are certainly a reflection of the firm commitment between Japan and Indonesia in promoting democratic values as a fundamental standard of social and political interaction of nations in the region.”