ADB Grants $1b Loan to Assist Gov't in Central Sulawesi Disaster Recovery Efforts

The Asian Development Bank has committed to provide an additional loan of $1 billion to Indonesia to support emergency response and reconstruction efforts following last month's devastating earthquake and tsunami in Central Sulawesi. (Reuters Photo/Jorge Silva)

By : Sarah Yuniarni | on 7:14 PM October 13, 2018
Category : Business, Economy

Nusa Dua. The Asian Development Bank has committed to provide an additional loan of $1 billion to Indonesia to support emergency response and reconstruction efforts following last month's devastating earthquake and tsunami in Central Sulawesi.

Vice President Jusuf Kalla told reporters on Saturday that the government will request assistance, including long-term loans, in accordance with the country's needs.

"We are still estimating the costs, including damage to housing and infrastructure. We will have further discussions with the ADB and the World Bank," Kalla said.

ADB president Takehiko Nakao announced the loan commitment after a meeting with President Joko "Jokowi" Widodo, Coordinating Economic Affairs Minister Darmin Nasution, Finance Minister Sri Mulyani Indrawati and Bank Indonesia Governor Perry Warjiyo on the sidelines of the 2018 International Monetary Fund and World Bank Annual Meetings in Nusa Dua, Bali, on Friday.

The ADB's $1 billion emergency assistance is offered in addition to the lender's $2 billion regular annual sovereign lending to Indonesia.

Half of the additional funding will go towards emergency recovery, while the rest will go towards rebuilding of infrastructure, including water supply, sanitation, schools, electricity, roads and bridges.

The emergency assistance loan, which will be arranged in close coordination with disaster-affected communities, stakeholders and the government and have a 32-year maturity and an eight-year grace period.

The ADB will also provide technical assistance for a government-led assessment, and for recovery planning and reconstruction efforts.

Bambang Susantono, ADB vice president for knowledge management and sustainable development, said the short-term priority now was the provision of emergency assistance, such as electricity, education and health care facilities for people affected by the earthquake and tsunami in Palu and Donggala.

"The next part involves assisting people to rebuild infrastructure," Bambang told reporters on Saturday.

The ADB previously approved a $3 million emergency grant, funded from the lender's Asia-Pacific Disaster Response Fund, to support immediate relief efforts in Central Sulawesi.

The ADB president also praised Indonesia for its solid macroeconomic management, emphasizing the stability of the country's fundamentals.

Southeast Asia's largest economy expanded 5.28 percent year-on-year in the second quarter of 2018 – its fastest pace in five years.

"The ADB continues to support Indonesia through project loans for various areas, including energy, skills development, irrigation and border-area development, as well as through policy-based lending with a policy matrix to support public-sector management and the investment climate," the lender said in a statement on Friday.

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