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ADB president announces $10 billion funding for Indonesia

Staff writer |
The President of the Asian Development Bank (ADB), Takehiko Nakao, met with Joko Widodo, President of Indonesia and discussed areas of future cooperation.

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At the meeting, Nakao announced that ADB will boost lending to the country from $740 million annually from 2010 to 2014, to as much as $2 billion a year, or $10 billion over the next 5 years, using its expanded lending capacity.

Mr. Nakao has also met with Vice-President Jusuf Kalla, Minister of Finance Bambang P.S. Brodjonegoro, and Minister of National Development Planning Sofyan Djalil. Nakao was also scheduled to meet Coordinating Minister of Economic Affairs Darmin Nasution.

During discussions with the government, Nakao said the increased ADB funding for Indonesia will support the government’s development priorities, particularly physical and social infrastructure.

In addition to project loans, ADB is actively using policy-based loans and results-based loans. Results-based loans link disbursements to the achievement of results instead of financing project-specific inputs.

Last year, ADB provided a total of $1.67 billion in loans to the country, which included a $400 million policy-based loan to promote financial market development and financial inclusion, another $400 million policy-based loan to develop the energy sector, and its first results-based loan of $600 million to sup

ort upgrading Sumatra’s power transmission and distribution networks. ADB support for this year will include loans in education services, public finance management, clean energy, rural infrastructure and flood control.

Mr. Nakao commended the government’s economic management last year. Inflation was low at 4% in December 2015, the fiscal deficit was contained to 2.7% of gross domestic product (GDP), and the current account deficit declined to 2.5% of GDP from 3% in 2014.

ADB forecasts Indonesia’s economic growth to rise to 5.3% in 2016 from 4.8% in 2015.

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