Indonesia to Ask for Second $300m Loan From AIIB for Kalimantan Road and Railway Projects
Jakarta. The government plans to borrow at least another $300 million from Asian Infrastructure Investment Bank (AIIB) to finance road and railway development in Kalimantan, senior officials said.
This would be the second loan from the China-backed development lender after it teamed up with the World Bank to give a $260 million loan to rejuvenate slum areas in Indonesia last month.
The government will use the loan to buy machines to lay down railway track ballasts in Kalimantan, Wismana Adi Suryabrata, the infrastructure deputy at the National Development Planning Agency (Bappenas), told the Jakarta Globe on Wednesday (13/07) .
"The machines are not available domestically, so getting them has become out first priority," Wismana said.
Track ballasts are the irregularly shaped gravels on which the rail track would rest. Indonesia can supply the gravel, but it does not have the machine used for tamping or laying down the ballasts.
Wismana did not say how much the entire project in Kalimantan would cost.
Another project the government wants to get a loan for is highway development in Derawan Islands in East Kalimantan.
Derawan is a cluster of 31 islands, submerged reefs and islets on the east coast of Berau, famous for its scenic beaches and natural ponds in which tourists can swim with non-toxic jellyfishes.
"The two projects will cost more than $300 million. We're still working on the proposal for the loan... [which will have] a tenor of 15 years with a five-year grace period," said Dewo Broto Joko Putranto, director for international development cooperation at Bappenas.
Dewo Broto said the government may eventually opt for a shorter term on the loan to lower the interest.
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