WB signs loan for Bengkulu

WB signs loan for Bengkulu

WASHINGTON (Reuters): The World Bank yesterday approved a $25.7 million loan to ease poverty in Indonesia's Bengkulu province, but a bank official said the loan was not linked to a $40 billion international rescue deal.

"This project is part of Indonesia's long-term rural development plan. It is not part of the rescue package," said the official, who asked not to be named.

A bank statement said the new World Bank loan would be used to boost growth, raise earnings and bring in new agricultural technologies in the Bengkulu region, an impoverished part of Sumatra. "About 40,000 households living in the 220 project villages...should benefit directly," it said.

The World Bank has promised to make $4.5 billion available to Indonesia's $40 billion International Monetary Fund-led rescue deal.

Senior officials said last week that two of these planned loans -- a $1 billion credit for balance of payments support and $300-500 million to help the farm sector -- would go ahead only if the IMF approved payments on its own $10 billion loan.