Government Guarantees Infrastructure Financing
Monday, 19 February, 2007 | 16:36 WIB

Tempo Interactive, Jakarta: The government will guarantee the development of infrastructure projects that are financed by national banks.

This statement was made by the Coordinating Minister for the Economy Boediono.

The guarantee is being given to prevent the banking sector from worrying about the risks involved in loan disbursements to these projects.

The projects that will be guaranteed include those involving public interests and are seriously required for supporting macro economic growth.

However, Boediono was still reluctant to explaining examples of the projects.

“We'll be very selective over the projects that will be guaranteed,” he said last week in his office.

On a different occasion, Bank Indonesia stated it will not loosen its policy on the maximum lending disbursement limit (BMPK) even if loans are used for financing infrastructure projects.

The central bank still limits loan disbursement at 30 percent maximally.

In issuing the policy, said Bank Indonesia Governor Burhanuddin Abdullah, the central bank must refer to international regulation.

As a result, all policies will adopt international standards.

However, he said that the regulation was still flexible, in addition to infrastructure development that state-owned enterprises carried out.

“We will be more flexible,” he said without explaining further.

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