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24
Juni
2021

Minister Suharso Attends Working Meeting with Commission XI DPR RI

JAKARTA, KT – Minister of National Development Planning attended a virtual Working Meeting with Commission XI DPR RI, Wednesday (23/06/2021).

Things discussed at the meeting included Planning and Management of Government Foreign Loans and Grants.

Foreign Grants are state revenues in the form of money, goods or services. Grant schemes can be in technical assistance (study, training), investment financing and project preparation and assistance form.

Meanwhile, foreign loans can be in the form of activity or project loans and cash loans or programs. Activity loans include project loans, credit lines, Export Credit Facilities, on-lending to local governments and state-owned enterprises, as well as on-granting loans to local governments.

Sources of foreign loans come from bilateral, multilateral, export credit facilities and foreign private loans.

Furthermore, cash loans include program loans, development policy loans, refinancing, stand by loans, program for result (PforR), Result Based Lending (RBL), short-term liquidity financing, contingency financing, and financing for capital. Foreign loans can also be channeled as direct loans (Direct Lending) to SOEs.

PHLN is not additional fund for domestic resources, but as a complement that acts as a catalyst that allows Indonesia to reach knowledge and good practices from other countries, in addition to improving institutional capacity, and providing input for improving existing strategic systems.

The main obstacle faced by Indonesia in responding challenges and realizing development plans is not merely the lack of financial resources but rather how to utilize resources.

In Presidential Decree No. 66/2015 concerning Bappenas, PP No. 10 of 2011 and Permen PPN/Ka. Bappenas No. 4/2011, in coordinating the search for funding sources, Bappenas plays a role in planning, preparing activities, monitoring and developing schemes.

The Minister also explained general policy of foreign funding. Foreign loans can be used to finance deficits and priority activities with a focus on financing economic and social infrastructure with technology transfer, international good practice and knowledge sharing, piloting projects that can be replicated with rupiah and have high leverage.

Minister Suharso assessed that use of foreign loans needed to consider interest rate, provision of goods with conditions and bonds (tied and untied), as well as the comparative advantage of development partners.

“The use of foreign loans is limited to the Maximum Loan Limit (BMP) set by the Minister of Finance as the maximum limit for withdrawing foreign loans per year,” said the Minister.

The Minister also added that in 2020-2024, the use of foreign loans is prioritized to meet the needs of Strategic Priority Projects (Major Projects) which are the reference for achieving the 2020-2024 RPJMN.

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