JAKARTA (TheInsiderStories) - Asian Development Bank is committed to allocate US$2 billion per year within 5 years to support Indonesia’s infrastructure development, an ADB executive said Tuesday (Mar 21).
Deputy Country Director of ADB Sona Shrestha said the loan will be used by Indonesia to support various infrastructure projects such as energy, regional development, irrigation and dams. Speaking during an infrastructure seminar in Jakarta on Tuesday, Sona said the investment of US$2 billion per year will be disbursed every year until 2019.
ADB in its report entitled ‘Meeting Asia’s Infrastructure Needs’, reveals that the Developing Asia will need to invest $1.7 trillion per year in infrastructure until 2030 to maintain its growth momentum, tackle poverty, and respond to climate change.
This report examines developing Asia’s infrastructure—defined as transport, power, telecommunications, water supply and sanitation. It examines how much the region has been investing in infrastructure and what will likely be needed through 2030. It also analyzes the challenges shaping future infrastructure investment and development.
Currently, the region annually invests an estimated $881 billion in infrastructure (for 25 economies with adequate data, comprising 96% of the region’s population). The infrastructure investment gap—the difference between investment needs and current investment levels—equals 2.4% of projected GDP for the 5-year period from 2016 to 2020 when incorporating climate mitigation and adaptation costs, ADB said.
Without the People’s Republic of China (PRC), the gap for the remaining economies rises to a much higher 5% of their projected GDP. Fiscal reforms could generate additional revenues equivalent to 2% of GDP to bridge around 40% of the gap for these economies.
For the private sector to fill the remaining 60% of the gap, or 3% of GDP, it would have to increase investments from about $63 billion today to as high as $250 billion a year over 2016–2020, it said. (*)