AIIB Offers Funding US$1B for Indonesia

Delegations of AIIB met with President Joko Widodo at the Bogor Palace on Monday (12/3). (Photo credit : Special)

JAKARTA (TheInsiderStories) – The Asian Infrastructure Investment Bank (AIIB) offered loans of US$1 billion for tourism, airports, ports, bridges and hydro power projects, said one senior official on Thursday (30/08).

According to the Minister of Public Works and Public Housing Basuki Hadimujono, in the meeting with President Joko Widodo at the Bogor Palace, Thursday (30/08), President AIIB Jin Liqun delivered his agency’ program to help Indonesia’ infrastructure projects.

So far, he said, three projects of his ministry have been funded by AIIB namely irrigation ($250 million), water supply ($125 million) and a slump areas ($216.5 million).

This time, Hadimuljono explained, the government offered several projects such as the development of tourism areas in the Mandalika in Lombok, Water Supply Jatigede in West Java and long-span bridge facility in the area of Kalimantan.

All the projects offered are part of the National Strategic Projects. The average term of the loan is given between 30 to 40 years.

Of the $1 billion, $355 million for bridge projects, Central Kalimantan highway at $250 million, the development of water supply procurement system in Jatigede $140.62 millions, also supply and water treatment program of $50 million.
Before meeting with President Jokowi, AIIB representatives have also had a conversation with the Minister of National Development Planning Bambang Brodjonegoro. The minister said the government is currently the focus in the construction of power plants with renewable energy and the expansion of the railway project. The offered project is included in the national medium-term development plan for 2020-2024.
He added, the government was preparing a list of infrastructure projects to be submitted to AIIB. The project will be financed, either by itself or AIIB other lending institutions like the World Bank and the Asian Development Bank.
Previously, the AIIB has plans to extend loans of around $4 billion in the next two years and Indonesia will get a significant amount of that, said its Director Chris Legg said after holding a meeting with the Indonesian President Widodo on March 12.
In the past two years since its inception, the AIIB has extended US$5.7 billion to its country members, $2 billion in the first year and US$3.7 billion in the second year. He said the AIIB so far has supported three projects in Indonesia.
Finance Minister Sri Mulyani Indrawati said AIIB has funded several projects in Indonesia, such as slum upgrade, dam operation improvement, and safety project phase 2 with a combined value of $225 million. Last year, Indonesia and AIIB worked together in two projects costs $100 million.
The first project is the development of regional infrastructure covering the provision of clean water and sanitation, flood management, waste management, and the arrangement of slum environment.
The government and the Bank also work for Dam Operational Improvement and Safety Project with total fund $125 million. The project is intended as a long-term government program to develop and improve capability in terms of dam management in Indonesia.
Indonesia is the eighth largest shareholders with a capital deposit of $672 million to be paid in 5 years. With this contribution, Indonesia has 3.36 per cent out of the entire AIIB’s capital.
China-led AIIB, was set up to help meet the estimated $26 trillion need for infrastructure spending in Asia through 2030. The Bank has pledged to use its investments to help members fulfil their commitments to the Paris climate accord.
AIIB is a new multilateral development bank founded to bring countries together to address the daunting infrastructure needs across Asia and beyond. Headquartered in Beijing, AIIB’s mission is to improve economic and social development in Asia by investing in high quality, financially viable and environmentally friendly infrastructure projects.
The first AIIB Annual Meeting of the Board of Governors was held in Beijing, China in 2016. The second Annual Meeting of the Board of Governors was held in Jeju, the Republic of Korea in 2017.