VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

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inance Minister Sri Mulyani Indrawati (second left) at the signing of a cooperation agreement between Jakarta and West Java provinces and PT SMI (Persero) in Jakarta on Monday (July 27, 2020). (ANTARA/HO-Finance Ministry Public Relations/sh)

The Indonesian government has sanctioned Rp16.5 trillion in loans for Jakarta and West Java provinces to fund infrastructure development, which has been stalled in wake of the COVID-19 pandemic.

Finance Minister Sri Mulyani Indrawati said regional governments are facing the tough task of reviving activities which could boost the economy, without risking an increase in coronavirus transmission.

"That will be a remarkably difficult task," Indrawati said at the signing of a cooperation agreement between Jakarta and West Java provinces with PT Sarana Multi Infrastruktur (SMI) in Jakarta on Monday.

PT SMI is among the Finance Ministry’s Special Mission Vehicles (SMV) and is engaged in financing and preparing infrastructure projects.

The Jakarta provincial administration has sought a loan of Rp12.5 trillion, out of which it plans to allocate Rp4.5 trillion for this year’s projects that have been hindered by the pandemic, the minister said.

The infrastructure projects include drinking water installation, flood control system, waste processing, transportation, tourism, and sport facilities.

Meanwhile, the West Java administration has sought a loan of Rp1.9 trillion for this year and Rp2.09 trillion for 2021, which will be used to develop social infrastructure such as hospitals, public health centers, and other health facilities.

West Java also plans to build logistics infrastructure such as roads, inter-city bridges, low cost housing, and improve some special areas, including city squares, tourist destinations, and creative centers.

"It will also develop environment infrastructure such as irrigation and drainage," Indrawati informed.

According to the minister, loans worth Rp10 trillion and Rp5 trillion will be sourced from the state budget for the National Economic Recovery Program (PEN) and channelled through PT SMI.

The government will offer a low interest rate on the 10-year tenure loans, and they could be included in the regional budget plan (APBD) or the revised regional budget plan.

"The government will also give interest-rate subsidy for the loans provided by PT SMI," she said.(ANTARA)