KPBU Scheme To Offer Funding Opportunities For Oil, Gas Industry

Jakarta (Antara Bali) - The Government-Enterprises Cooperation (KPBU) scheme will offer funding to goods and service providers in the oil and gas industry amid sluggish prices, Energy and Mineral Resources Deputy, Coordinating Ministry for Economic Affairs Montty Girianna stated.

"The KPBU is been applied in infrastructure projects, such as power plants, highways, and ports. The scheme is to outline risks between entities (commercial risk) and the government (regulatory risk) with greater precision, so that the commercialization of the projects can be achieved," Montty stated in a press release received by Antara here on Friday.

Montty said that goods and service providers face several challenges related to availing funding facilities from national banks that are less competitive as compared to their foreign counterparts.

One facility is to provide cash loans at a higher interest rate between two to three percent compared to foreign banks, with additional guarantees, or collateral guarantee, that are higher by 25-30 percent.

According to Montty, the necessary breakthrough for the national banking system in the form of the commercial synergy scheme will help to face this challenge.

On the other hand, since 2008, all oil transactions are required to be carried out through state banks using ASR or Abandonment and Site Restoration funds that have accumulated in national banks and will serve as a foundation to realize the commercial synergy scheme.

Meanwhile, Director for Business Development Tripatra Raymond Naldi proposed the capitalization of banks through short-term financing with competitive interest rates.

In addition, the refund of excess taxes (refund value-added tax) is accelerated and the imposition of a final income tax rate, which is more flexible, is viewed as an opportunity to boost the flow of funds (cash flow) to national contractors.

"With a strong cash flow, existing funds can be allocated to improve the quality of human resources. In the end, local contractors are expected to become more focused on their core businesses and not on costs," Raymond added.(WDY)