Thailand in $655 mln loan deal with Japan's JICA

BANGKOK, March 30 - Thailand's Finance Ministry has signed a deal to borrow about 63 billion yen ($655 million) from a Japanese government agency to help finance a mass transit project, the ministry said on Monday.

The 25-year loan from Japan International Cooperation Agency (JICA)would carry an interest rate of 1.4 percent a year, with a seven-year grace period, the ministry said in a statement. It said the loan, which was approved by parliament last week, would be used for the "Red Line" rail project in the Bangkok suburbs, which involves total investment of about 75.5 billion baht ($2.1 billion).

The government is also seeking to negotiate another $2 billion in 7-10 year loans from the World Bank, the Asian Development Bank and JICA, which it expects to receive in the third quarter.

Like other countries, Thailand is rolling out a package of stimulus measures, including tax breaks, cash handouts, and cheap utilities and transport, to prop up the economy.

The government also plans to spend 1.56 trillion baht on infrastructure projects over the next three years, which it hopes will create 1.6 million jobs and deliver economic growth of 5 percent per year.

It is not clear how the government will finance the massive infrastructure programme, but the ministry has talked of a mix of domestic and foreign borrowing and joint ventures with the private sector. ($1=35.50 Baht) ($1=96.24 Yen)