ADB lends $292m to Indonesia

ADB lends $292m to Indonesia

Agence France-Presse, Manila

The Asian Development Bank (ADB) has approved two loans totaling US$292.2 million to Indonesia, the bank announced Wednesday.

The first loan, amounting to $250 million, will go to support a program of reforming financial governance and social security in Indonesia, the ADB said in a statement from its headquarters in the Philippine capital.

In addition, the ADB will extend a $1 million technical assistance grant for a feasibility study on the proposed reforms.

The program will address weaknesses exposed by the 1997 Asian financial crisis: excessive dependence on bank financing and imprudent lending, a small and underdeveloped non-bank financial sector, lack of accountability and independence, inadequate regulation and supervision, and weak corporate governance.

The second loan, amounting to $42.22 million, will go to help develop regional governments in Indonesia in support of the country's decentralization process, the ADB said.

This will include helping regional governments deliver public services efficiently, maintain essential public facilities, promote equitable economic development and carry out poverty reduction programs.

In support of this loan, the ADB will extend a $1.2-million technical assistance grant to monitor the program.