ADB grants $6.6m for Aceh<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Asian Development Bank (ADB) and the Indonesian government
\nsigned three grant agreements on Wednesday totaling US$6 million
\nto help improve livelihoods, rehabilitate natural resources and
\nprovide earthquake-resistant housing in the tsunami-affected
\nprovince of Aceh.<\/p>\n
Also signed was a $600,000 technical assistance grant to
\nsupport the initial operation of Indonesia's newly established
\nsecondary mortgage facility agency, PT Sarana Multigriya
\nFinansial (SMF).<\/p>\n
The agreements were signed by ADB Country Director Edgar A.
\nCua and the Ministry of Finance's Director General of the
\nTreasury, Mulia P. Nasution. Present at the event was SMF
\npresident director Erica Soeroto.<\/p>\n
Cua explained that the grants for Aceh would consist of a $2.5
\nmillion grant to help develop sustainable livelihoods in 20
\ncoastal communities in Aceh Besar and Aceh Utara regencies by
\nproviding fishing boats and post-harvest facilities for small-
\nscale fishermen and farmers.<\/p>\n
Another $1.5 million grant would further support the
\ncommunities by rehabilitating 30 hectares of coral reefs and 300
\nhectares of mangrove forest, both of which locals had relied on
\nfor food, construction materials and coastal protection.<\/p>\n
Lastly, a $2 million grant would be used to develop prototypes
\nof earthquake-resistant housing, build 300 such units in 16
\ntsunami-affected areas, and provide a purchase loan scheme, Cua
\nsaid. It is estimated that 115,000 new houses are needed after
\nthe tsunami destroyed about $1.4 billion worth of residential
\nproperty.<\/p>\n
The projects to be supported by the three grants, which are
\npart of the ADB's $290 million Asian Tsunami Fund, will be
\ncarried out over a period of two years, with the money coming
\nfrom the Bank's Japan Fund for Poverty Reduction (JFPR).<\/p>\n
Meanwhile, regarding the $600,000 in technical assistance
\ngrants for SMF, Cua said that the money would be used to develop
\nthe agency's operating guidelines, standardize its documentation,
\nand support its formulation of secondary mortgage facility
\nproposals.<\/p>\n
The funds are derived from the ADB's Japan Special Fund and
\nwill be implemented over the next six months.<\/p>\n
SMF was established in July to provide a market-driven
\napproach in financing the development of low-cost housing, while
\nalso providing affordable mortgage loans for the purchase of low-
\ncost housing.<\/p>\n
Under the scheme, SMF will purchase qualified mortgages from
\nfinancial institutions with proceeds of bond sales backed by
\nthese assets.<\/p>\n
However, since a sufficient quantity of qualifying mortgages may
\nnot yet be available, SMF will for the first three years firstly
\nlend to the financial institutions, which will on-lend for
\nqualifying mortgages. These loans will help financial
\ninstitutions build qualified mortgage portfolios for later
\npurchase by SMF, as well as track records.<\/p>\n
Erica said that the target market for these mortgaged-backed
\nsecurities would be long-term investors, such as insurance firms
\nand pension fund managers.<\/p>\n
The government has invested initial equity of Rp 1 trillion
\n(some $100 million) in the SMF, which will eventually be replaced
\nby equity from the private sector up to a third of the total
\nequity.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/adb-grants-66m-for-aceh-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}