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tate lender Bank Negara Indonesia (BNI) hopes to issue yen-denominated bonds, popularly known as '€œsamurai bonds'€, next year as it seeks to generate long-term financing for major infrastructure projects.

BNI treasury and financial institutions director Suwoko Singoastro said that the bank would look for opportunities to issue around US$1 billion-worth of debt papers in Japan in 2016.

'€œWe would like to issue the debt papers up to that amount, even though we plan on setting the minimum amount at $500 million. We will issue the bonds in yen, but will immediately swap the proceeds into US dollars,'€ he said on the sidelines of a cross-currency swap agreement event with national carrier Garuda Indonesia on Monday.

BNI plans on using funds generated from the samurai bonds to finance upcoming major projects and to repay some if its maturing loans that will become due in 2017, according to Suwoko.

It hopes its current partnerships with around 54 Japanese regional lenders will help BNI achieve the issuance target as they are expected to purchase the debt papers, along with its other corporate clients in Japan.

The selection of the Japanese market as the next bond issuance destination was also based on BNI'€™s robust business in the country, Suwoko added.

He previously said that its operations in Japan currently contribute the most to the bank'€™s profits of all its overseas operations. Besides having foreign offices located in Tokyo and Osaka, BNI now also has them in Hong Kong, London, New York and Singapore.

BNI business banking director Krishna R. Suparto acknowledged that the bond issuance would help the lender match its financing needs with its funding sources.

'€œWe are looking into various projects at the moment, especially infrastructure ones that are promoted by the government. Funds from the sale of debt papers will definitely meet our funding needs for the projects because of their long maturity profile,'€ he said.

Some of the projects that BNI is setting its sights on include the development of toll roads, seaports and electricity transmission infrastructure.

'€œNow infrastructure-related projects make up for 8 percent of our total business banking loans. We hope to see the portfolio rise this year, but we are waiting for more clarity from the government regarding its priority list,'€ Krishna added.

The latest data from BNI show that by the end of 2014, its outstanding business banking loans reached Rp 207.18 trillion ($16.31 billion). An 8 percent figure would put infrastructure lending at only Rp 16.57 trillion of the total business banking segment.

The government itself has frequently expressed its intention to speed up infrastructure work across the country, in an effort to accelerate economic growth in the next five years.

Infrastructure spending has received the second-largest budget allocation this year after education spending, getting around Rp 281.1 trillion, as stated in the revised 2015 state budget draft.

Meanwhile, Suwoko added that the bank had begun holding talks with state oil and gas firm PT Pertamina and state electricity firm PT PLN to meet their hedging needs.

Following the issuance of hedging regulations by Bank Indonesia and the State-Owned Enterprise Ministry, state-owned enterprises (SOEs) are now required to carry out hedging mechanisms to secure their foreign-denominated transactions.

Both Pertamina and PLN are reportedly the SOEs with the largest foreign exchange needs at the moment, amounting to hundreds of millions of US dollars per day each.

According to Suwoko, BNI may have to partner with other lenders to provide hedging services to the two companies, citing their vast amount of US dollar needs.