Jakarta. Indonesia recently secured another Japanese loan worth 83.4 billion yen or approximately $528.4 million for the Patimban Port expansion.

In 2017, Tokyo greenlit a 118.9 billion yen loan for the construction of the port in West Java and lent another 70.2 billion yen to expand the Patimban Port in 2022. 

The freshly announced 83.4 billion yen funding will go into constructing a new port that will include container terminals, according to the Japan International Cooperation Agency (JICA), which is in charge of disbursing the funds. Other facilities will include a 13.7-hectare car terminal, access roads, and a one-kilometer bridge, to name a few.

The 83.4 billion yen loan adopts a tied loan scheme under the so-called Special Term Economic Partnership (STEP). In other words, Indonesia has to procure Japanese goods and expertise, including the technology needed for the quay wall or seawall construction and reclamation, to name a few.  This is unlike the general untied loans that let Indonesia as the borrower procure goods and services from any country.

The project has a 0.3 percent annual interest rate. The interest rate for the consulting services portion stands at 0.2 percent each year. Indonesia has 40 years to pay off those debts. Japan has granted a 10-year grace period for this financing. Indonesia is planning to have the new facilities to operate by 2028, according to JICA data. 

According to the Japanese Embassy in Indonesia, the port’s car export capacity is expected to increase to 600,000 units once the project is completed.

In late 2021, the government appointed the Indonesian consortium Pelabuhan Patimban International as the port’s operator. Toyota Tsusho Corporation, the trading arm of the Toyota Group, also took over the car terminal operations that year through its operating company Patimban International Car Terminal.

The loan signing took place ahead of Japanese Prime Minister Shigeru Ishiba’s recent meeting with President Prabowo Subianto in Bogor. In his joint press statement, Prabowo said that both leaders had a “very friendly and intensive discussion”.

“We are committed to continue our partnership in economy and infrastructure,” Prabowo said.