Govt to guarantee oil refinery projects

The government plans to provide a special guarantee for the development of oil refinery projects in the country to ensure that such high capital intensive investment projects will be able to receive competitive bank loans.

Evita H. Legowo, the director general of oil and gas at the Ministry of Energy and Mineral Resources, said in Jakarta on Friday that the planned investment guarantee would be similar to those given for power projects currently being built under the 10,000 MW power plant development plan.

?The Ministry of Energy and Mineral Resources will recommend providing investment guarantee and zero-import duty so that oil refinery projects will be able to get lower bank loans,? he said.

The investment guarantee and import duty incentive are currently being discussed by the ministry and other related government institutions such as the Ministry of Finance and the Investment Coordinating Board (BKPM).

Meanwhile, Muhammad Lufti, the head of BKPM, said that there were four incentives currently being worked out for the oil refinery projects. They included a tax holiday of between 10 and 15 years, and off taker guarantee in which the government in certain condition will buy all the production, he said.(bernard)