REPUBLIKA.CO.ID, JAKARTA -- The government has set aside at least Rp250 billion to subsidize bank interests on loans taken by regional drinking water supply companies (PDAMs) to invest in increasing the capacity of clean water supply in 2015.
The government has provided a subsidy of five percent maximally for interest on bank loans, Head of the Support Agency for the Development of Drinking Water Supply Systems (BPPSPAM) Tamin M. Zakaria Amin recently noted in a statement.
The loans will be used for investment to increase the capacity of clean water supply in line with the scheme of restructuring PDAMs.
"At the end of 2014, five PDAMs used the bank interest subsidy scheme, with a total investment of Rp951 billion," he revealed.
In 2015, 11 PDAMs will invest in increasing the capacity of clean water supply with a total investment worth Rp2.9 trillion.
In 2013, the government approved investments worth Rp583 billion by five PDAMs.
During the 2013-2015 period, 21 PDAMs are expected to make a total investment worth Rp4.43 trillion for increasing the capacity of clean water supply.
If the bank interest is 12 percent, a PDAM will pay the interest based on the interest rate set by Bank Indonesia (BI) at 7.75 percent, while the remaining 4.25 percent will be paid by the government.
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