JIBC to decide on PGN?s special Yen loan Monday: PGN

State gas distribution company PGN said on Thursday Japan International Bank Corporation will decide on the fate of US$415 million special yen loan that carries low interest rate which will be used by PGN to partly finance South Sumatra-West Java gas pipeline.

?A team from JIBC is currently conducting due diligence and studying the feasibility of the project and we expect them to give final say whether or not the loan will be granted as early as Monday,? said Adil Abas, a director at PGN.

Adil said he was optimistic the loan would be granted.

The Japanese government, in principal, has agreed to provide soft loan worth US$415 million to finance the West Java ? South Sumatera gas pipeline project. The loan which would be disbursed through Japan Bank for International Corporation (JBIC) will carry interest rate of 0.75 percent per annum. The loan maturity will be 40 years, with a grace period of 10 years.

PGN needs about US$486 million to finance the construction of the gas transmission network which will pass through Pagar Dewa in South Sumatera, Cilegon, and Cimanggis in West Sumatera. US$415 million of the total funds are expected to be financed by the Japanese soft loans. The project is part of the cooperation agreement between PGN and Pertamina in the distribution of gas in Java. (alex/godang)