Recent Examples

Buyer Credit for Increase in Fertilizer Production to Bolster the Food Supply

With over 200 million people, Indonesia must establish a stable food supply. The Government of Indonesia has thus undertaken an agricultural development policy, putting a priority on raising the domestic supply ratio of rice. In recent years, as farmland increased under this policy, domestic demand for fertilizer has climbed steeply. In this respect, higher fertilizer production is key in preventing civil unrest due to rice and other food shortages. In response, the government plans to construct three fertilizer plants to be run by P.T. Pupuk Kalimantan Timur, a state-owned company. JBIC co-financed a loan (buyer credit) of US$ 217 million along with other institutions for the second project, following the loan for the first plant project in December 1998. Buyer credits of ¥83.2 billion have been extended to date, representing JBIC's significant contributions to Indonesian fertilizer production.

Untied Two-Step Loans to Support Indonesia's Export Industry

In June 1998, a loan agreement of up to US$1 billion equivalent in yen was signed to help support the country's export-led economic recovery. The proceeds of the loan were used for the settlement of transaction based on the Letters of Credit issued by Indonesian local banks to finance imports for the Indonesian export sector. The loan was provided under the difficult economic situation in Indonesia where the shortage in foreign exchange and a fall in credit rating of the Indonesian banks had made it increasingly difficult for those local banks to issue Letters of Credit to finance imports of raw materials and components necessary for manufacturing export products.

Co-financing with IMF and ADB to Stabilize Indonesia's Economy and Strengthen Its Power Sector

In March 1999, two untied loan agreements totaling ¥210 billion (equivalent to US$1.4 billion) were signed to assist Indonesia in its rehabilitation and restructuring of the economy as well as its strengthening of the power sector. One of them was a parallel loan with the IMF's Extended Fund Facility (EFF) to support the economic rehabilitation and structural adjustments of the Indonesian economy that had been seriously affected by the Asian economic crisis, through macroeconomic stabilization, financial reform and corporate reform. The other was a co-financing loan with the ADB's Power Sector Restructuring Program Loan designed to establish a competitive market for electricity and ensure the financial viability of PT Perusahaan Listrik Negara (PLN), with the prime aim of restructuring the power sector and improving its efficiency.