The World Bank will provide Indonesia with a loan facility of more than $1 billion to support the recovery and reconstruction of disaster areas in West Nusa Tenggara and Central Sulawesi. (Antara Photo/Yusran Uccang)

World Bank Pledges $1b Loan for Central Sulawesi, Lombok Disaster Recovery

OCTOBER 14, 2018

Nusa Dua. The World Bank will provide Indonesia with a loan facility of more than $1 billion to support the recovery and reconstruction of disaster areas in Lombok, West Nusa Tenggara, and Central Sulawesi.

The facility, which will be available upon request, will include an additional $5 million grant for technical assistance.

"The government appreciates the attention and support from the international community in our time of need, including from the World Bank Group. Restoring the lives and livelihoods of the people affected by natural disasters is the government's utmost priority," Finance Minister Sri Mulyani Indrawati said in a statement on Sunday.

The government plans to use the funds for a reconstruction program to rebuild infrastructure and public facilities, including hospitals, schools, bridges, roads, highways and a water supply system.

Some of the funds will also be used to rebuild houses and to improve the tsunami early warning system.

The World Bank has looked at several indicators, including geospatial distribution of damage to infrastructure and residential and non-residential property, to estimate the loss from the earthquake and tsunami that struck Palu and Donggala in Central Sulawesi on Sept. 28.

"By working with the government on resilience, disaster recovery and preparedness, we aim to help ensure that Indonesia continues its upward economic path," World Bank chief executive Kristalina Georgieva said in the statement.

Indonesia is located on a tectonic faultline, known as the Pacific Ring of Fire, which makes it prone to volcanic eruptions, earthquakes and tsunamis. But it lacks funds to mitigate such disasters. The country has only been able to set aside Rp 4 trillion ($263 million) annually over the past three years for this purpose.

The World Bank estimates that the Central Sulawesi disaster has resulted in damage of more than Rp 8 trillion. This includes Rp 2.75 trillion to residential housing, Rp 2.82 trillion to non-residential buildings and Rp 2.5 trillion to infrastructure.