World Bank approves three projects worth $460 million

The Jakarta Post, Jakarta

The World Bank said on Tuesday it had just approved three projects in Indonesia worth US$460 million to support poverty reduction in the country.

The three projects are a sub-district community development project (KDP3), water resource and irrigation sector management program, and the Java-Bali power sector restructuring and strengthening project.

"The three projects will play an important role in reducing poverty and restoring key infrastructure," World Bank country director for Indonesia Andrew Steer said in a press statement.

The KDP3 project aims to reduce poverty and improve governance in rural areas by providing block grants to sub-districts to support cost-effective, community based investment plans.

Communities then use these funds for infrastructure such as roads, irrigation, clean water supply system as well as for social services such as school buildings, clinics and training programs.

Between 1998 and 2002, the project funded the development of many infrastructure facilities, and economic and social activities affecting some 35 million low-income people.

"The new project will continue to support village empowerment and the national decentralization program," the release said.

The water resources and irrigation sector management program seeks to support Indonesia's program in water resources and irrigation.

Meanwhile, the Java-Bali power sector restructuring and strengthening project aims at improving the performance of the power sector in the densely populate Java-Bali region amid a looming power crisis.

Through the project, the state-owned power company (PLN) will be supported to pursue a financial and corporate restructuring plan and strengthen the Java-Bali electricity supply system.

The Bank said that it would also assist the state gas company (PGN) to prepare the groundwork for restructuring its gas transmission and distribution given the importance of natural gas for power generation.

Previously, the World Bank had approved a $250 million loan to Indonesia for financing health programs, poverty alleviation as well as road and other infrastructure projects.