- Region: Asia
- Untied Loans
April 7, 2009
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1 signed today a program agreement and a contingent loan agreement with the Government of the Republic of Indonesia (GOI) for providing financial support for the GOI in the aggregate amount of Japanese yen equivalent to up to US$1.5 billion through the following financial facilities:
<a> A guarantee for yen-denominated foreign bonds issued by the GOI in the Japanese bond market (Samurai bonds)*2.
<b> A contingent loan facility through collaboration with the World Bank and Indonesia's other development partners.
- This financial support is based on a basic agreement reached on February 21, 2009 between Japanese Parliamentary Secretary for Finance, Mr. Shinsuke Suematsu, and the Indonesian Minister of Finance, Dr. Sri Mulyani Indrawati*3. Given the unstable international financial market, JBIC intends to support the GOI's funding efforts in the Japanese bond market, while putting in place a contingency measure to cope with further turmoil in the international financial market in cooperation with the World Bank, the Asian Development Bank (ADB) and Indonesia's other development partners. These two financial facilities will support the GOI's efforts to stabilize the country's economy and its fiscal situation.
- Samurai bond issuance with JBIC guarantee will diversify funding sources for the GOI. Additionally, offering a new investment product is expected to contribute to further activating the samurai bond market. Furthermore, participation in joint support in response to the financial market turmoil with the World Bank, ADB and other development partners will serve to stabilize the Indonesian economy and the overall Asian economy.
- In "responding to disruptions in financial order in the international economy," one of the fields set out in its mission, JBIC is committed to addressing the current global financial turmoil by mobilizing a variety of financial tools, including those used for this financial support.
- *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 Samurai bonds are yen-denominated bonds issued in Tokyo by a foreign government or company.
- *3 See the press release on February 23, 2009, "Financial Support for the Government of the Republic of Indonesia."