Indonesian Minister of National Development Planning Bambang Brodjonegoro and ADB Representative at ADB's Bilateral Meeting with Southeast Asian Department (SERD) in Nadi, Fiji, on Wednesday (05/01).

JAKARTA (TheInsiderStories) – Indonesian government received an fresh funding from the Asian Development Bank (ADB) worth of US$2.6 billion to support strategic infrastructure projects during 2019, said the Fund on Wednesday (05/01). In 2018, ADB committed $3.9 billion to 19 projects in the archipelago.

According to Southeast Asia Director General Ramesh Subramaniam said one of the biggest projects targeted by ADB was the construction of two power plants, one of which was $600 million to build a power plant in Papua.

“The loan with the same value will be used to finance the gas power plant construction project in cooperation with PT Perusahaan Listrik Negara through the negotiation process in July-August,” he said.

ADB has also prepared a credit facility worth $100 million to be channeled to PT Indonesia Infrastructure Finance (IIF), he added. The loan will be used to improve Palu’ infrastructure such as roads, water sanitation and irrigation facilities which were destroyed due to the phenomenon of soil liquefaction.

Beside, Indonesia also submitted an emergency assistance loan with the Emergency Assistance Loan for Rehabilitation and Reconstruction (EARR) scheme to the ADB worth $297.91 million for the post-earthquake and tsunami rehabilitation and reconstruction project in Central Sulawesi.

According to Minister of National Development Planning Bambang Brodjonegoro, the loan will be divided into two projects which will be carried out by the Ministry of Public Works and Public Housing and the Ministry of Transportation.

“A loan of $188.16 million was proposed to finance the rehabilitation and reconstruction of social infrastructure and water resources, while loans for port and airport transportation infrastructure projects are worth $109.75 million,” he said at ADB’ Bilateral Meeting with Southeast Asian Department in Nadi, Fiji, on the same day.

Currently, he said, the loan proposal is being prepared by the Indonesian government and awaiting approval from the Ministry of Finance. In the near future, it expects to immediately be proposed and negotiated with the ADB.

“We will look for a more programmed approach in accordance with the core sector and government priorities to ensure a long-term prosperity partnership,” he said.

Moreover, the Indonesian government and ADB representatives in Indonesia are trying to formulate a Country Partnership Strategy (CPS) 2020-2024 and Country Operation Business Plan (COBP) 2020-2022. COBP consists of a pipeline of various projects from various sectors that reflect government needs based on priority sectors in the National Medium Term Development Plan (RPJMN).

“This pipeline will also accommodate government needs for the RPJMN 2020-2024,” he explained.

In this COBP, he explained, the main sectors of the project were the energy sector (37 percent of total loans), public management (20 percent), finance (11 percent), and agriculture and natural resources (11 percent).

The other sectors in the COBP platform are urban water and service sectors (7 percent), education (6 percent), transportation (5 percent), and social protection (3 percent).

“The COBP pipeline line also consists of a mixture of good and balanced sources of capital (a well balanced mix of modalities),” he said.

Brodjonegoro stressed, in the period 2020 – 2022, average project loans had a share of around 57 percent of the total pipeline, policy-based loans of 24 percent, and result-based loans of 18 percent.

“With all the potential for future cooperation, we hope that the partnership between Indonesia and ADB will bring more positive and concrete results for development in Indonesia and bring a more prosperous impact to the Indonesian people,” the Minister concluded.

Written by Daniel Deha, Email: daniel@theinsiderstories.com