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.