Jakarta. Indonesia has cancelled plans to take out a loan from the Asian Development Bank (ADB) to finance its national housing program, including subsidized housing. Housing and Settlements Minister Maruarar Sirait said on Wednesday that the government has opted to rely on domestic funding sources instead.

The decision came after the government secured financing commitments from Indonesia’s sovereign wealth fund Danantara and additional fiscal support from Bank Indonesia.

In February, ADB had offered a loan of $138 million to support Indonesia’s 3 Million Homes Program, with discussions suggesting the loan could be expanded further.

However, Danantara, along with state-owned banks under its umbrella, has pledged Rp 130 trillion (approximately $8 billion) in financing for the housing sector through the microcredit program (KUR). This is further supported by fiscal incentives from Bank Indonesia.

“I made the decision to stop foreign borrowing for the housing sector. The proposal for foreign loans did not come from me, but from my director generals,” Maruarar said.

Despite declining the ADB loan, the minister expressed appreciation for the strong interest and support from international financial institutions, highlighting their confidence in President Prabowo Subianto’s administration.

Maruarar confirmed that the decision was made in coordination with the president and stressed that his ministry would now rely solely on domestic funding facilitated by Danantara.

“I have spoken with President Prabowo Subianto, and the Housing and Settlements Ministry will not require any foreign loans this year. Thanks to the support from the president, Bank Indonesia, the Finance Ministry, and Danantara, we are fully funded domestically,” he said.