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IFC funds trans-PIR project

Down To Earth 32 - February 1997

The International Finance Corporation, private sector arm of the World Bank, has agreed to provide US $41 million in equity and loans to an Indonesian company to develop oil palm estates and refineries in West Kalimantan.

The IFC has also helped the company, PT Kalimantan Sanggar Pusaka, raise a $10 million loan from the German Development Bank.

Kalimantan Sanggar is a subsidiary of the forest-based Satya Djaya Raya Group, popularly known as Lyman Group.

The company will use part of the loan to develop 34,000 hectares of oil palm plantations under the nucleus estate/smallholder scheme which uses transmigrant families, as well as local farmers. Corporate secretary Indradi Kusuma said the project will help raise the living standards of more than 17,000 rural families. He quoted IFC's director for agribusiness development Karl Voltaire as saying " we are pleased to be associated with a project that has a high development impact." (Jakarta Post 22/11/96)

Unfortunately, the project probably will have a high development impact, the negative kind, that leads to explosions of social tension like the recent events in Sambas.