Jakarta. Japan announced Tuesday that it had agreed to give about 15.5 billion Japanese yen or nearly $99 million worth of loans to Indonesia to improve its fishing ports.

The funding would go into the feasibility study for the development of Indonesian ports, including one in the country’s most modern city Jakarta. The loan deal is also quite timely as President Prabowo Subianto wants the country to be self-sufficient in food production by 2027.

“This program aims to increase the catch volume [in Indonesian ports] while improving the quality of its marine products through cold supply chains. … It is exactly in line with Prabowo’s food self-sufficiency agenda,” Hajime Ueda, the economic affairs minister at the Japanese Embassy to Indonesia, told reporters in Jakarta.

The freshly announced funding would cover ports in eight locations, namely Jakarta, Banda Aceh, Riau’s Bagansiapiapi, Natuna, Central Java’s Pekalongan, North Sulawesi’s Likupang, Papua’s Biak, and South Papua’s Merauke. They will kick off with a feasibility study and the so-called “detailed design” process on the aforementioned locations, which typically aims to lay out the project objectives and activities. These studies will identify which fishing port classifies as “high priority” for the rehabilitation works of its landing docks, fishery processing facility, and cold storage, among others.

The loan has a fixed rate of 1.8 percent. Japan has also set a fixed annual interest rate of 0.2 percent for the consulting service portion. Indonesia has 30 years to pay off its debt, but Tokyo has granted Jakarta a 10-year grace period. Like most Japanese official development assistance (ODA) financing, the $99 million loan is untied. In other words, Indonesia does not have to exclusively procure Japanese goods and services for this project.

The Central Statistics Agency (BPS) data shows that archipelagic Indonesia has 532 fishing ports spread across the country. Most are located in Aceh, of which its capital Banda Aceh is one of the $99 million funding target area.

Japan International Cooperation Agency (JICA) is in charge of administering the funding. This is also not the first time for the agency to lend some money to Indonesia. The Jakarta Globe also asked how confident JICA was in Indonesia’s ability to pay off its growing debt.

JICA's chief representative for Indonesia Sachiko Takeda said: “We usually take a look at the country’s growth forecasts and debt repayment ability. We believe that Indonesia can pay it off in the future.”

The $99 million funding follows similar projects, including a 2.5 billion yen worth of Japanese grant for a fishing port development project. In 2020, Indonesia and Japan inked technical cooperation on fishing port facilities and markets on the former’s remote islands: Sabang, Natuna, Morotai, Saumlaki, Moa, and Biak. The project is mostly completed, and this has opened up the possibility of these ports using the increased catch to supply Prabowo’s upcoming nutritious meal campaign. Ueda said that Japan had also had talks with the National Nutrition Agency, which is in charge of overseeing the free meal program.

“The increased catch [in the ports that we cooperate on] means that the fishermen can sell the relatively expensive fish in markets, including for exports. But they can use the more affordable fish to supply the free meal program at local schools. Fish is also a major source of protein, and it can help tackle stunting,” Ueda said.