ADB may disburse $1.2 billion this year

The Jakarta Post Jakarta

The Asian Development Bank (ADB) is considering disbursing between US$1.15 billion and $1.2 billion in loans this year that were put on hold last year when the terms and conditions set on them were not met, an ADB executive said on Monday.

Visiting ADB vice president John Lintjer said the loans, if disbursed, would be used to finance development projects here.

"We are hoping this year to be able to disburse our commitments from last year to the government of Indonesia. This isn't a new commitment, but it will be for 2002," Lintjer was quoted as saying by detik.com after meeting with Vice President Hamzah Haz at the palace.

Some of the ADB loans come attached to reform targets that the government must first meet before they are disbursed.

Last year the ADB withheld a significant portion of its loans that would have financed, among other things, power projects. The loans were withheld because the government was unable to get a new electricity law in place.

Securing these loans would help the cash-strapped government finance some of its development needs.

Lintjer said that during his meeting with Hamzah, he asked how Indonesia had been using the ADB loans and whether the money had reached its intended targets.

Pervasive corruption in Indonesia remains a major concern to international lenders, who want to ensure their loans are used effectively.

ADB vice president for Indonesia, David Green, said most of the loans the ADB planned to disburse this year would finance infrastructure projects and poverty reduction programs.