Germany agrees to provide $74.3m for Aceh and Nias

Urip Hudiono, The Jakarta Post, Jakarta

The German government agreed on Thursday to provide 59 million euro (some US$74.3 million) in grants to help Indonesia finance 11 rehabilitation and reconstruction projects in Aceh and Nias, which were both devastated by natural disasters.

Germany also expressed its commitment to contributing up to eight million euro for a multidonor trust fund set up by the government and the World Bank to meet Aceh's reconstruction needs, and to providing more debt swap schemes for Indonesia.

A memorandum of understanding on the grants was signed by the National Development Planning Agency's deputy for development financing, Prasetijono Widjojo, and an official from the German Ministry for Economic Development and Cooperation, Christian Neumann.

The signing was witnessed by State Minister for National Development Planning Sri Mulyani Indrawati, German Ambassador to Indonesia Joachim Broudre-Groeger and Aceh Reconstruction Agency head Kuntoro Mangkusubroto.

With these grants, Germany has now provided a total of 123 million euro in reconstruction aid for Aceh. The country also donated 56 million euro in the period immediately following the Dec. 26 tsunami.

Broudre-Groeger expects the grants will help start "converting the figures of committed funds into concrete projects" for the reconstruction of Aceh.

"We hope the grants will be used for projects that are really needed by the people of Aceh," he said.

He hopes for close cooperation between donors, the government and related agencies to monitor the disbursement of the funds. The ambassador also welcomed the progress made in the Helsinki talks between the government and the Free Aceh Movement (GAM), saying peace and stability were crucial for the province's sustainable development.

Mulyani said she hoped Germany's contribution to the Aceh trust fund would increase the international community's confidence in the fund. She also reiterated the government's commitment to ensuring the accountability of the funds.

The government has estimated it will require at least Rp 41 trillion ($4.35 billion) to rebuild Aceh and Nias island over the next five years.

The Aceh multidonor trust fund is expected to pool some $500 million in grants, while Indonesia also has received a $2.4 billion debt moratorium from the Paris Club of major creditor countries.