US$ 200 million for Indonesian infrastructure reforms

By Chris Sleight02 December 2010

The Asian Development Bank (ADB) is to lend US$ 200 million to an Indonesian government programme to remove obstacles to infrastructure development. It will be the ADB's third loan to the country's Infrastructure Reform Sector Development Programme, following previous financing totalling US$ 680 million.

"The goal of the programme is to improve the climate for infrastructure investment, resulting in more financing from both public and private sectors, which will aid the government's efforts to boost growth and lower poverty through economic and employment opportunities," said Anthony Jude, Director in ADB's Southeast Asia Department.

The programme, which began in 2006, has focused on both sector and cross-sector reforms including measures to encourage public-private-partnerships (PPPs), viewed as crucial for Indonesia to meet its infrastructure investment requirements. The estimated investment for 2009 to 2014 is about US$ 140 billion. The ADB says that while investment has picked up since the Asian financial crisis of 1997 to 1998, it is still not enough to support the Government of Indonesia's goal of achieving annual growth of more than +6%.

The third phase incorporates a broad range of policy reforms covering regulatory changes affecting the transport, energy, water and telecommunications sectors, and the development of a legal framework for PPP projects.

"The programme has played an important role in developing an enabling environment for PPPs, including establishing financing mechanisms, and a number of PPP projects in the transport, energy and water sectors have now been initiated," said Mr Jude.

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