ADB Signs MOU with Indonesia for Framework on Disaster Support

JAKARTA, INDONESIA (6 January 2005) - ADB and the Government of Indonesia yesterday signed a Memorandum of Understanding (MOU) on the framework for ADB's emergency assistance to the country following the tsunami disaster on 26 December.

Signing for the Government were Minister of Finance Jusuf Anwar and Minister of Development Planning Sri Mulyani, while Shamshad Akhtar, Director General of ADB's Southeast Asia Regional Department, signed for ADB. It was signed on the eve of the ASEAN Leaders' Special Meeting today, which ADB President Tadao Chino is attending.

ADB last Friday announced that up to $325 million would be available immediately in response to requests from

Indonesia, Maldives, and Sri Lanka to help finance priority reconstruction and rehabilitation work.

The Indonesian Government has estimated the immediate relief needs at $150 million. In order to meet these needs, the Government has requested the support of ADB and other development partners on an emergency basis.

Under the MOU, ADB's proposed assistance to Indonesia involves three parallel steps:

  • Reprogramming of up to US$120 million from selected ongoing projects to meet emergency needs.
  • ADB could also expand the scope of two projects at an advanced stage of processing due for consideration in the first quarter.
  • A new Emergency Assistance Loan could also be processed for ADB Board approval by April.

"The reprogrammed funds would be directed toward high priority activities, such as the restoration of livelihoods and basic infrastructure and services, such as health, education, and water supply and sanitation," says Ms. Akhtar.

"The emphasis here is on speed and flexibility. The final amounts mobilized will be guided by the findings of the joint damage and needs assessment, to be launched with the Government and other development partners as early as next week."

ADB is also exploring with development partners the possibility of mobilizing cofinancing support for the phased assistance under the three steps and will be working closely to assess priority requirements for the proposed assistance.

The MOU says that while a quick response is essential, good governance in project administration and financial management is equally important. "ADB will coordinate with the World Bank to harmonize the procurement procedures to facilitate emergency support," the MOU says.