RI gets $228.6m in soft loans, grants
RI gets $228.6m in soft loans, grants
The Jakarta Post, Jakarta
The World Bank, the Asian Development Bank and Kreditanstalt
fuer Wiederaufbau (KfW) of the German government all approved a
combined amount of US$228.6 million in soft loans and grants to
Indonesia on Wednesday.
Overall, the World Bank is the biggest contributor having
pledged loans worth $200 million, followed by KfW, which promised
to provide $18 million in loans.
The remaining $10.8 million will be in the form of grants from
KfW ($7 million) and the Asian Development Bank ($3.6 million)
respectively.
A World Bank spokesman said here that the loan was consistent
with the bank's assistance strategy and would be used to finance
road improvements in the eastern parts of the country.
The project will cover a total of 15 provinces in Indonesia's
eastern islands, namely Kalimantan, Sulawesi, Bali, Nusa
Tenggara, Maluku and Irian Jaya.
"This project is in line with the government's plan to bridge
the development gap in the lagging eastern provinces of
Indonesia; better infrastructure will boost economic growth in
these provinces through improved access," said Hatim Hajj, an
official with the World Bank's East Asia and Pacific department
as quoted by Dow Jones.
"The project will help improve access to employment
opportunities, health, education, and other social services and
facilities, and hence help to reduce poverty," he added.
On Wednesday, officials from Indonesia's Ministry of Finance
also signed a loan agreement with KfW, a press release said.
The loans and grants were funded by the German Federal
Ministry of Economic Corporation and Development.
While the soft loans are aimed at raising the standard of
maritime education and training in the country, the purpose of
the grant is to provide clean water for the population of three
districts in Nusa Tenggara Timur (NTT) province.
The loan will provide funds for maritime simulators,
laboratory equipment, teaching materials and consultancy
services.
As for the grant, it will focus on the construction and
rehabilitation of water supply systems and shall contribute to a
sustainable reduction of drinking water-related diseases.
Meanwhile, ADB, through the Asian Currency Crisis Support
Facility (ACCSF), will provide two technical assistance grants
amounting to $3.6 million for Indonesia for the reform of state-
owned enterprises (SOEs), with the government of Japan providing
all the funds.
Of the total grants, $1 million will be used to accelerate the
SOE reform program, while the remaining $2.6 million will be
allocated to restructure SOEs.
Under the project, ADB will help the government introduce a
performance incentive scheme in 30 SOEs, restructure at least 10
and privatize at least five.
The project will also provide training program for 120
government officials, SOEs managers and staff in the fields of
corporate governance, restructuring procedures and privatization
options.
The project is expected to be completed by March 2003.