ADB-World Bank to Fund Infrastructure Project

VIVAnews - Infrastructure Fund will be stimulated by the Asian Development Fund and the World Bank. The additional fund is expected to be disbursed by late February or early March 2009.

Coordinating Minister for the Economy Deputy Assistant on Infrastructure and Area Development, Wahyu Utomo, said that the fund has been allocated and can be made use of in the first half of 2009.

"Each institution will disburse Rp 1 trillion (US$84 million). The government will also provide Rp 1 trillion. Therefore, total fund will be Rp 3 trillion (US$252 million). It could even possibly reach Rp 4 trillion," he said.

The fund, he said, would take form of either loans or equities. However, the disbursement mechanism is not yet settled. "The infrastructure fund is still being finalized. Hopefully, it will be worked out soon," he said.

Infrastructure fund is aimed as an alternative financing for high-valued projects having long-term development. "Therefore, the infrastructure fund is established because it is quite difficult for such financing institution as banks to finance [the projects]," he said.

However, taking into account the high-valued infrastructure projects, initial-phase fund in the infrastructure fund does not seem to be sufficient. It is expected that in the next five years, the total funding may reach Rp 20 trillion (US$1.68 billion).

Translated by: Bonardo Maulana Wahono