Japan to provide Indonesia $809 million in climate change loans

August 21, 2011

The Japanese government has signed an agreement to provide about 62.3 billion yen (USD809 million) in new climate aid to Indonesia, one of the biggest emitters in the developing world, according to a report in Reuters.

The agreement was signed in Jakarta on Thursday by the Japanese ambassador to Indonesia and officials at the Indonesian Finance Ministry's, Japan's Foreign Ministry said in a news release.

Almost all of the money (60.3 billion yen) was provided in the form of low interest loans, mainly to build five geothermal power plants. The cash will be repaid over 40 years at 0.3 percent annual interest.

According to the World Bank, Indonesia has the world's largest geothermal resources, with nearly 40 percent of known global resources. It is estimated that the country has 27 gw of geothermal generation capacity.

The cash is part of Japan's contribution to a USD30 billion global fund to help poor countries adapt to climate change and cut their emissions.

Japan pledged 1.75 trillion yen in aid, worth USD15 billion at the time, although the amount is worth USD22.7 billion due to the strength of the yen against the dollar.