The Japan Bank for International Cooperation (JBIC) has signed two loan agreements totalling around Y2.7bn (US$24mn) and Y1.6 billion (US$14mn) respectively, with the government of the Republic of Indonesia. The loans are being cofinanced with private financial institutions with Sumitomo Mitsui Banking (SMBC) as the lead bank.
The loans will finance Marubeni Corp and Sumitomo Corp, as they export power transmission and substation facilities (including transformers and underground cables) to PLN, a state-owned power company, which is implementing a power substation expansion project in Indonesia.
The exported facilities will be used for constructing new gas insulated switchgear (GIS) substations and expanding those already in existence, as well as laying underground cables across Java. This will enable PLN to meet growing power generation and transmission in the capital city of Jakarta, where demand for electricity is greatest, by serving to transmit and distribute power at a stable voltage.
JBIC has supported Indonesia’s power sector over the years with a combination of export loans and ODA loans. Furthermore, JBIC has been making a comprehensive effort to help steer sector reform efforts by engaging in consultations with stakeholders, including the Indonesian government.