World Bank, ADB commit $1b in loans each for disaster recovery

IMF-WORLD BANK 2018 - NUSA DUA. The World Bank (WB) and Asian Development Bank (ADB) have pledged US$1 billion each in funding to support disaster recovery, rehabilitation and reconstruction in Lombok, West Nusa Tenggara and Palu, Central Sulawesi.

Both international financial institutions have expressed their condolences for Indonesia and the people affected by the earthquakes and tsunami, and are eager to provide assistance to boost the country’s long-term resilience.

“The government’s immediate relief efforts are robust and impressive. As we enter the reconstruction phase we are making up to $1 billion of comprehensive support available for Indonesia,” said WB chief executive officer, Kristalina Georgieva.

The proposed package could include cash transfers and an emergency recovery program to fund the rebuilding of crucial public facilities and infrastructure such as hospitals, schools, roads, highways. The funding will be available upon request from the government.

The WB has estimated that the total physical loss caused by the tsunami in Sulawesi is around $531 million, comprising approximately $181 million in residential housing, $185 million in the non-residential sector and $165 million in infrastructure.

Besides the WB, the ADB has also shown its commitment to supporting Indonesia by offering a $1 billion concessional loan for post disaster recovery, rehabilitation and reconstruction in affected areas.

ADB president Takehiko Nakao mentioned that in addition to an emergency budget support loan of up to $500 million, the ADB was ready to provide additional financing of about $500 million through project loans to support the construction of crucial infrastructure such as roads, bridges, water supply and sanitation.

The emergency assistance is in addition to the ADB’s regular sovereign lending program to Indonesia of around $2 billion per year.

The loans offered by the ADB will have special terms, with an eight-year grace period and a repayment period of 32 years, longer than usual.