ADB announces $1 bln loan for Indonesia

MANILA, June 4 (Reuters) - The Asian Development Bank announced on Thursday it had approved a $1 billion loan for Indonesia to help the country sustain expenditure on poverty alleviation, social protection and infrastructure maintenance.

"The global financial crisis has made it expensive for Indonesia to access international debt markets and trade finance, which could constrain spending on essential social services and poverty alleviation programmes," Jaseem Ahmed of ADB's Southeast Asia Department said in a statement.

"This loan will enable the government to maintain public expenditures, and to respond more effectively to the poverty impacts of the financial crisis."

The loan will enhance Indonesia's financial safety net, better mobilise funds from commercial markets, and maintain financial sector stability, thereby reducing the government's costs for borrowing from the market, the ADB said.

The single-tranche loan will have a 15-year term, including a 3-year grace period, with an interest rate determined in accordance with ADB's LIBOR-based lending facility. (Reporting by Raju Gopalakrishnan; Editing by Neil Fullick)