ADB, 8 Aug
2011
MANILA,
PHILIPPINES – The Asian Development Bank (ADB) is providing Indonesia with a
$100 million loan to finance community-driven projects that upgrade basic
infrastructure in rural villages and improve sanitation services in poor urban
neighborhoods.
The loan
will expand ADB’s support for the National Program for Community Empowerment
(PNPM Mandiri) for poverty reduction by providing direct assistance to poor
communities.
While
Indonesia has made significant progress in fighting poverty and achieving the
Millennium Development Goals (MDGs), about 31 million people, many of them in
rural areas, remain trapped in poverty. The causes of poverty include lack of
access to basic services, absence of economic opportunities, limited access to
capital, and poor rural connectivity and infrastructure.
About half
of rural villages are not connected by asphalt road, and one in every ten
villages are inaccessible at certain times of the year. In addition, only about
half of the national population has access to improved sanitation.
Consequently, some 30% of Indonesians suffer from water-borne diseases,
including diarrhea and typhoid fever, that are linked to the use of untreated
water and poor sanitation.
“The
project will provide block grants directly to the communities to improve basic
infrastructure facilities and sanitation services, including the construction
of public baths, toilets and washing facilities, as well as waste treatment and
disposal systems,” said Wolfgang Kubitzki, ADB Principal Social Sector Economist.
“Around 1.3
million people in rural communities and urban neighborhoods in nine provinces
in Indonesia will benefit from the project,” he added.
The project
will also improve the capacity of the communities to carry out their own design
and implementation of the projects to ensure that the investments reflect the
need of the communities and are sustainable.
The ADB
loan, from its ordinary capital resources, covers about 73% of the total
project cost of $135.6 million, with the government financing around 19% and
beneficiaries providing the balance in the form of counterpart contributions to
community investments.
The
Ministry of Public Works is the executing agency for the project, which is due
for completion around March 2015.
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