WB approves $115m loan to Indonesia

JAKARTA (JP): The World Bank announced at the weekend that it had approved two International Development Association (IDA) credits worth US$115.4 million for health and water and sanitation projects in Indonesia.

"Both of these projects have a strong anti-poverty focus, and are geared towards improving the lives of the poor by delivering essential basic services -- health and clean water or sanitation -- to poor communities in a decentralized environment," said World Bank country director for Indonesia Mark Baird in a statement.

"These projects, funded by zero-interest IDA funds, are part of our efforts to soften the terms of our overall assistance to Indonesia and help reduce the government's debt service," he added.

Baird said that the Bank planned to develop similar projects in other sectors and areas of Indonesia as part of its new country assistance strategy.

The Bank said that the health sector project was focused in Lampung and Yogyakarta.

It said that the first aim of the project was to protect health services, which are essential not only for the poor but for the public at large, while initiating key sector reforms and ensuring health sector financing.

The Bank said that the second objective was to help the Ministry of Health carry out its new role in a decentralized system -- a role which encompasses analysis of key issues, advocacy of best practices and standards, and support for local initiative and innovation.

The Bank said that the water and sanitation project was aimed at improving the health status of poor communities by reducing water, sanitation, and hygiene-related illnesses in underserved rural villages.

The project would be implemented in about six provinces, the Bank added.

The Bank is scheduled to sign the loan agreement with the Finance Ministry on Tuesday. (rei)