ADB To Raise Infrastructure Development Loan Extended To Indonesia

Jakarta (Antara Bali) - The Asian Development Bank (ADB) plans to increase the loan extended to Indonesia by 40 percent to US$2.2 billion next year to support infrastructure development in the country.

"Next year, we will scale up the loan to about US$2.2 billion from US$1.4 billion in 2015," ADB Vice President, Bambang Susantono, said after meeting with Indonesian Vice President, Jusuf Kalla, on Thursday.

 According to Susantono, Indonesia certainly requires greater financing to build infrastructure.

Meanwhile, ADB Country Director for Indonesia, Steven Tabor, said the lending rate would be 1.2 percent for a gross period of five years.

"Most of the budget will be used for infrastructure projects that require several years to be executed," he said.

In addition, the Indonesian government will use the grant to build infrastructure each year as part of efforts to spur economic growth.

Susantono explained that the government would evaluate developmental needs gradually, although there would be a number of sectors, which would use the result-based landing mechanism.

"The result-based landing mechanism is used by the ADB to facilitate and finance the infrastructure built by a state-owned enterprises or ministry," he stated.

He explained that using such a financing mechanism could boost the infrastructure development in Indonesia. (WDY)