ADB may disburse $1.2b this year

The Jakarta Post, Jakarta

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

Visiting ADB vice president John Lintjer said the disbursement of the loans 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 Vice President Hamzah Haz at the palace.

Parts of the ADB's loans are attached to reform targets, the government must first meet before the bank disburses its loans.

Last year the ADB withheld a significant portion of its loans which would have finance, among other things, power projects, as the government was unable to get a new electricity law in place.

Getting these loan programs to work now would help the cash strapped government finance some of its development needs.

Lintjer said in his meeting with Hamzah, he had asked him how Indonesia had been using the ADB's loans, and whether they had been used right on target.

Indonesia's pervasive corruption remains a major concern to international lenders wanting to ensure their loans were used effectively.

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

Under a deal last year with the government, the ADB has committed loans of between $600 million and $1.2 billion annually until the year 2004. The high range of the lending depends on the government's success in meeting various reform targets.