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Indonesia

Exchange of Notes for Japanese ODA Loan and Grant Aid for the Republic of Indonesia

  1. The Government of Japan has decided to provide a Japanese ODA loan of up to 76.5 billion JPY in total to the Government of the Republic of Indonesia in order to support financial and social development efforts of the country. In addition, Japan has also decided to extend grant aid totaling up to 3.069 billion JPY to the Government of Indonesia. Notes to this effect were exchanged on March 18 (Thu) (local time: same day) in Jakarta between Mr. Kojiro Shiojiri, Japanese Ambassador to Indonesia, and Mr. T.M. Hamzah Thayeb, Director General for Asia Pacific and African Affairs, Ministry of Foreign Affairs of the Republic of Indonesia.

Among these projects, one loan project and two grant projects (2. (2), 3. (3) and 3. (4) below) are extended as part of the Hatoyama Initiative. In the field of climate change, Japan will continue to work in collaboration with Indonesia, that has associated itself to the Copenhagen Accord, towards the construction of a fair and effective framework as well as the agreement on ambitious goals with all the major nations.

2. Outline of the ODA Loan Projects

3. (1) Java-Sumatera Interconnection Transmission Line System Project (I) (36.994 billion JPY)

This project provides necessary funds to construct power transmission lines to deliver surplus electricity from Sumatera to Java (including lines running under the sea).

- Interest: 1.4% per annum (general terms and conditions)

- Repayment period: 30 years (including a 10-year grace period)

- Procurement: General untied

4. (2) Lumut Balai Geothermal Power Plant Project (26.966 billion JPY)

This project provides necessary funds to construct a geothermal power plant in South Sumatera province, and also to test-drill geothermal wells in the area with high geothermal potential.

- Interest: 0.3% per annum (climate change program loan) (0.01% per annum for Consulting Services)

- Repayment period: 40 years (including a 10-year grace period)

- Procurement: General untied

5. (3) Regional Solid Waste Management for Mamminasata, South Sulawesi (3.543 billion JPY)

This project provides necessary funds to develop a final waste disposal site in the metropolitan area of the Mamminasata region in South Sumatera province. This project also introduces regional waste management system targeting multiple districts.

- Interest: 0.65% per annum (preferential terms)

(0.01% per annum for Consulting Services)

- Repayment period: 40 years (including a 10-year grace period)

- Procurement: General untied

6. (4) Sixth Development Policy Loan (8.997 billion JPY)

In cooperation with the World Bank and the Asian Development Bank (ADB), this loan is intended to support planning and enforcement of policies to improve investment climate, to?improve fiscal administration, and to drive poverty reduction through policy dialogue with the Government of Indonesia.

- Interest: 0.7% per annum (general terms and conditions)

- Repayment period: 15 years (including a 5-year grace period)

- Procurement: General untied

7. Overview of grant aid projects

8. (1) The Project for Safe School Reconstruction in Devastated Areas of Earthquake in Offshore of Padang in West Sumatra (549 million JPY)

This project provides the necessary funds for reconstructing six elementary schools and three junior high schools that were affected by the earthquake disaster off the shore of Padang, West Sumatra, on September 30, 2009 as safe, earthquake-proof buildings. It is expected that this project will contribute to reviving the area as one that is resistant to natural disasters by providing a safe and favorable educational environment to children and students in the disaster struck area, as well as having the schools serve as shelters and disaster prevention centers for citizens living in the affected area.

9. (2) The Food Security Project for Underprivileged Farmers (520 million JPY)

This project provides the necessary funds to carry out the provision of fertilizer, with the aim of assisting underprivileged farmers and cooperating with government policy of Indonesia for agricultural promotion. It is expected that this project will contribute to increasing the food supply and reducing poverty.

10. (3) Forest Preservation Programme (1 billion JPY)

This programme provides the necessary funds for the provision of equipment such as satellite images necessary for forest monitoring and machinery for forestation to strengthen forest management ability through improving the monitoring of forest resources, as well to support forest creation activities by local residents. It is expected that this programme will contribute to the decrease of greenhouse gas emissions through supporting forest reduction countermeasures.

11. (4) The Programme for the Improvement of Capabilities to cope with Natural Disasters Caused by Climate Change (1 billion JPY)

This programme provides the necessary funds for the provision of equipment such as power shovels and training to operate provided equipment to support the strengthening of the ability of relevant organizations to respond to disasters such as floods. It is expected that this programme will contribute to the reduction of damages caused by disasters through improving the ability of relevant organizations to carry out relief activities swiftly during times of disasters.