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ADB Committing $300 Million in Tsunami Funds for Reconstruction in Indonesia

JAKARTA, INDONESIA (11 March 2005) - The Asian Development Bank (ADB) is committing grants totaling about US$300 million from its Asian Tsunami Fund [ PDF ] to help rebuild parts of Indonesia shattered by the December 2004 earthquake and tsunami disaster, it was announced today.

The funds, accounting for about half of ADB's initial contribution of $600 million to the trust fund, will finance a multisector project [ PDF ] to support disaster management, reconstruction and rehabilitation in affected areas of Aceh and North Sumatra.

"The project will have the two pronged aim of helping in the rebuilding of areas devastated by the tsunami by restoring essential infrastructure and services, and ensuring that incomes and livelihoods are quickly restored," said ADB President Haruhiko Kuroda.

He today signed a Memorandum of Understanding in Jakarta with the Indonesian Government on the creation of the project, which will be carried out in two phases:

• The first phase, to be carried out between April of this year and June 2007, will tackle urgent priorities in disaster management, rehabilitation and reconstruction in some of the less devastated zones. These include health, rural water and sanitation, irrigation and flood control, restoration of roads and bridges, local government capacity building, and spatial planning.
• The second phase, from July 2005 to April 2008, will carry out disaster management and reconstruction activities in the most devastated zones. Work will include expansion of activities under Phase 1, restoration of community infrastructure, spatial redesign of affected zones, power and rural electrification, and public administration.

ADB set up the trust fund that will finance the project in February to deliver prompt emergency assistance to the tsunami affected countries. The fund will pool and deliver grants for emergency technical assistance and investment projects to support reconstruction and rehabilitation in India, Indonesia, Maldives, Sri Lanka, and Thailand.

The fund takes ADB's total financial commitment on tsunami assistance to $775 million, which includes $175 million that can be redirected from ongoing projects and programs for the tsunami effort. Some $125 million of these existing projects will be reprogrammed in Indonesia.

ADB is hosting a Ministerial-level conference on 18 March to sustain the momentum in the rebuilding of tsunami-affected countries of Asia. The meeting aims to establish the progress made to date and share information to avoid wasteful duplication and overlap.

Participants will identify gaps in the recovery effort, explore areas for greater coordination and harmonization, and discuss ways to ensure the highest standards of governance in the countries' handling of reconstruction assistance.

In January, an ADB team took part with the Indonesia Government and development partners, including the World Bank, UN and other agencies, on a joint needs assessment, which put reconstruction needs in Indonesia at $1.5 billion in 2005 and $4.5 billion-$5 billion in 2005-2009.

The Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 63 members, with 45 from the region.

Visit ADB's tsunami response site for regular updates.

More at adb.org/media

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