Japan has agreed to provide new loans amounting to US$796 million to Indonesia to fund a number of infrastructure projects and development programs.

The diplomatic notes for the loans were signed Tuesday by Masafumi Kuroki, Japan's acting charge d'affairs in Indonesia, and Primo Alui Joelianto, the Indonesian Foreign Affairs Ministry's director general for Asia Pacific and African affairs.

A press statement issued by the Japanese Embassy here said that Japan expected to see an improvement in the investment climate and improved human resource development in Indonesia as a result of the loans.

The loans were also aimed at helping stabilize the country's macroeconomic situation and strengthen governance reform.

The annual interest on the loans is between 0.4 and 1.5 percent, and they mature in between 30 and 40 years.

With the new loans, Japan's aggregate loans to Indonesia, Southeast Asia's largest economy, now amount to around $34.46 billion.

The new loans will be used to finance various projects, including the construction of the Tanjung Priok Port access road ($228 million), the Asahan No.3 hydroelectric power plant in North Sumatra ($ 237 million), the Kamojang geothermal power plant extension ($8 million, for engineering services only), an integrated water resources and flood management project in Semarang ($140 million), human resources development projects ($83 million), and a project for improved policy development ($100 million).