Disbursed: IDR 11.5 Trillion ADB Loan to State Treasury, Here is the Allocation
The Asian Development Bank (ADB) has approved a loan programme worth US$650 million, or approximately IDR 11.5 trillion, to support Indonesia in modernising regional fiscal management, advancing digital governance, and improving the delivery of public services.
Under the sub-programme ‘Accelerating Decentralisation for Improved Local Governance’ (ADIL), the ADB loan facility will strengthen coordination between the central and regional governments in managing public funds.
“This programme will support a new national digital platform for the integration and reporting of fiscal data, as well as fairer property tax assessments to increase regional revenue,” said ADB Director for Indonesia, Bobur Alimov, in a statement in Jakarta on Wednesday.
Furthermore, the cooperation framework covers various issues related to the protection of civil rights, including responsive planning and budgeting to protect women and girls, as well as disaster risk integration.
“The Indonesian Government’s aspiration to become a high-income country by 2045 is strategically supported by economic development across provinces, regencies, and villages, where essential public services are provided. An increasingly strengthened national fiscal and digital architecture enables better service provision for the community,” said Bobur.
Bobur noted that 35-40 per cent of total public expenditure, including for education, health, and local infrastructure, is managed at the regional level. Therefore, according to him, strengthening the public financial management system in the regions is crucial to addressing inequalities in fiscal and administrative capabilities. Such disparities can affect tax administration, policy coordination, and the provision of public services across various regions.
The ADIL programme is a continuation of the Law on Financial Relations between the Central Government and Regional Governments. This programme is aimed at addressing various structural challenges within Indonesia’s regional fiscal system.
The programme also supports the 2025-2029 National Medium-Term Development Plan (RPJMN) and the Indonesia Gold Vision 2045, specifically in accelerating economic growth, reducing poverty and inequality, and strengthening environmental sustainability.