WB provides $110m loan for Bali infrastructure

JAKARTA (JP): The World Bank has approved a US$110 million loan to help finance an urban infrastructure development project in Bali and improve the sustainability of infrastructure services in that province.

The bank said over the weekend the loan would make up most of the project (32.9 percent), which has a total cost of $334.7 million.

The rest would come from the local government of Bali (27.2 percent), the private sector (16.6 percent) and the central government (10.11 percent), with the remainder coming from Bali's water enterprises, the provincial government, the Asian Development Bank, Japanese grants and others.

The statement said the project would meet the basic needs of all urban centers and the needs of the growing urbanization in South Bali.

The project would consist of urban infrastructure investments, private sector participation, cultural heritage conservation and institutional strengthening.

Through urban infrastructure investments, the project would improve urban roads and traffic management operations, extend and rehabilitate water supply networks, increase drainage and flood control capabilities, improve solid waste management and sanitation systems and provide infrastructure to neighborhood improvement programs.

Under the project's private sector participation, technical assistance would be given to facilitate private sector investment and participation in water supply and solid waste projects.

The cultural heritage conservation program would provide technical assistance and training to rehabilitate selected historical sites and strengthen the provincial and local capacity in conserving cultural heritage.

Under the institutional capacity development program, the funds would go to improving the capacities of central, provincial and local government agencies in project implementation, environmental management and community consultations.

The World Bank estimated the number of urban dwellers in Indonesia to reach 90 million by the year 2000.

Rapid urban growth in Indonesia has placed huge constraints on infrastructure resources, resulting in only 20 percent of urban households having direct access to piped water and only 40 percent to sanitation facilities, the bank said.

The World Bank said in a statement over the weekend that inadequate industrial water supply, liquid and solid waste disposal and degraded environmental conditions were "serious problems" threatening the physical and economic health of Indonesia's urban areas.

"These problems highlight the need to increase the quality and coverage of urban services, greater decentralization of responsibility to local governments, greater private sector and community participation and environmental sustainability," it said. (pwn)