OREANDA-NEWS. September 7, 2007. In the course of Russian President Vladimir Putin’s formal visit to Indonesia the State Corporation “The Bank for Development and Foreign Economic Affairs (Vnesheconombank)” and the Indonesian Finance Ministry signed an Agreement on the Procedure for Making Payments and Maintaining Accounts to Monitor the Use and Repayment of the Government Credit Extended by the Russian Federation to the Republic of Indonesia.

The Agreement was signed to build on the intergovernmental Russian-Indonesian Agreement On Extending by the Russian Government a Government Credit worth 1 billion US dollars to the Government of Indonesia.

The credit is extended to pay for the supplies of Russian military hardware at an annual interest rate of 5.3% and is to be repaid within a period of 10 years including a five-year grace period.

Under the intergovernmental Agreement VEB is to act as an authorized agent for the Russian side to monitor the use and repayment of the government credit. The “technical” agreement made with the Indonesian Finance Ministry establishes the procedure for maintaining accounts, exchanging data on the debt and other payment aspects.