A national government agency has loaned authorities in Bandar Lampung Rp 96 billion ($10.2 million) to build two flyovers and extensions of several roads in the capital of southern Sumatra’s Lampung.
State Investment Agency (PIP) chief Soritaon Siregar and Bandar Lampung Mayor H. Herman H.N. signed the loan in the city on Monday, the Finance Ministry said. The loan, with an interest rate of 7.75 percent, will mature in five years, according to the statement.
Bandar Lampung will use Rp 62.5 billion to build two elevated roads in the city and Rp 33.5 billion to finance the expansion of roads. Many roads in Lampung, home to much of the country’s robusta coffee-growing industry, have been damaged, causing a bottleneck in the transportation of goods and commodities.
The PIP recently provided a Rp 50 billion loan to help build the Amlapura craft market in Bali.
Under the government’s MP3EI economic development plan, Sumatra’s growth is set to come from its natural resources and energy sectors.
Inadequate infrastructure has been identified as a key impediment to doing business in Indonesia. Substandard roads and port facilities have added to the time and cost of transporting goods to customers both within Indonesia and abroad.
The national government has been mulling plans to build a bridge connecting Lampung with Banten in Java.