Indonesia

Signing ceremony for the exchange of notes for Japanese ODA loan and grant aid to the Republic of Indonesia

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1. The Government of Japan has decided to extend to the Republic of Indonesia a Japanese ODA loan of up to 37.444 billion JPY for Climate Change Program Loan (II) with Economic Stimulus Support, grant aid of up to 1.522 billion JPY for the Project for Improvement of Bridges in Nias Island, and grant aid of up to 492 million JPY for the Project for Construction of Bridges in the Province of Nusa Tenggara Barat, Phase 2. A signing ceremony for the exchange of notes was held on December 10 (Thu) in Bali, Indonesia between H.E. Mr. Kojiro Shiojiri, Ambassador of Japan to Indonesia, and H.E. Dr. R.M. Marty M. Natalegawa, Minister for Foreign Affairs of Indonesia, with H.E. Mr. Hatoyama Yukio, Prime Minister of Japan, and H. E. Dr. H. Susilo Bambang Yudhoyono, President of the Republic of Indonesia, in attendance.

2. Climate Change Program Loan (II) with Economic Stimulus Support

1) Terms and conditions of the Loan

A. Climate Change Japanese ODA Loan
Credit limit: 28.083 billion JPY
Interest rate: 0.15% per annum
Repayment period: 15 years (including a 5-year grace period)
Procurement method: General untied

B. Emergency Budget Support Japanese ODA Loan
Credit limit: 9.361 billion JPY
Interest rate: the applicable London inter-bank offered rate applied for six months lending in Japanese yen
Repayment period: 15 years (including a 3-year grace period)
Procurement method: General untied

2) Outline of the Project

This Program Loan is the first concrete case of the "Hatoyama Initiative," and supports the Government of Indonesia's efforts for measures against climate change. By supporting Indonesia's climate change counter-measures through policy dialogue, this program loan provides approximately 28.1 billion JPY as "Climate Change Japanese ODA Loan" to contribute to (a) the mitigation of global warming by carbon absorption and emission control, (b) strengthening adaptability to bad effects of climate change, and (c) responding to cross-sectoral issues of climate change.

In addition, as a result of the global financial crisis, the financial revenue of the Government of Indonesia declined sharply and caused a short-term credit crunch. In light of this, approximately 9.4 billion yen will be provided for an "Emergency Budget Support Japanese ODA Loan" with a view towards further pushing forward Indonesia's efforts on climate change counter-measures.

It is expected that this Program Loan will further facilitate measures related to climate change in Indonesia, the country with the third largest amount of CO2 emissions after China and America. It is also expected that the loan will contribute to the continued economic development of Indonesia.

3. The Project for Improvement of Bridges in Nias Island (Grant Aid)

1) This project is for the provision of financial resources needed to repair and replace six long bridges in Nias Island in order to make them earthquake-resistant. Nias Island is located in the western portion of Indonesia, which suffered serious damage as a result of the earthquakes that took place off the coast of northern Sumatera in 2004 and 2005.

2) It is expected that this project will facilitate the transport of goods and contribute to the promotion of reconstruction and recovery of areas affected by the disasters through the restoration of the six bridges in Nias Island, making use of Japan's excellent technology in the field of earthquake resistance.

4. The Project for Construction of Bridges in the Province of Nusa Tenggara Barat, Phase 2 (Grant Aid)

1) This project will provide the financial resources needed in order to construct four bridges located in the western portion of highway running along the southern coast of Sumbawa Island, West Nusa Tenggara Province in the Eastern portion of Indonesia, which is one of the poorest regions in all of Indonesia.

2?It is expected that this project will contribute an improved way of life for residents living in the region including an improvement in access to public services and other services, and a boost in the flow of people and goods due to year-round travel of ordinary vehicles on the western portion of this highway becoming possible.

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