Indonesia: Rural Infrastructure Support to the PNPM Mandiri Project II

Sovereign Project | 38385-013


ADB is supporting the expansion of Indonesia’s national poverty reduction program in rural areas. Following a community-driven development approach, the project will boost services and infrastructure and build social capital in about 1,500 villages in four provinces: follows a community-driven development approach.

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Project Name Rural Infrastructure Support to the PNPM Mandiri Project II
Project Number 38385-013
Country Indonesia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2575-INO: Rural Infrastructure Support to the PNPM Mandiri Project II
Ordinary capital resources US$ 84.24 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Agriculture, natural resources and rural development - Irrigation - Rural water supply services

Education - Pre-primary and primary

Health - Health system development

Public sector management - Decentralization - Social protection initiatives

Transport - Road transport (non-urban)

Gender Equity and Mainstreaming

The Project forms part of the Government of Indonesia's ongoing flagship poverty reduction program the National Program for Community Empowerment (PNPM Mandiri).

The Asian Development Bank (ADB) supports the PNPM Mandiri through the Rural Infrastructure Support to PNPM Mandiri Project I

(RIS-PNPM I), which included community facilitation and mobilization, and rural infrastructure support in the four provinces of Jambi, Lampung, Riau, and South Sumatra. The Project continues the support for RIS-PNPM I, financing two cycles of village planning and block grants in about 1,500 villages in 215 kecamatans in four provinces. The Project follows a community-driven development approach and will empower communities; strengthen their capacity to prioritize, design, implement, and monitor community-based projects; and provide block grants to finance community-identified needs and priorities.

Project Rationale and Linkage to Country/Regional Strategy

Poverty is particularly high in rural areas of Indonesia, where more than two-thirds of the country's poor people live. The causes of rural poverty include lack of access to basic services such as health, education, safe water, and sanitation; absence of economic opportunities; limited access to capital; and poor rural connectivity and infrastructure. The rural population is vulnerable to external shocks and the large numbers of "near poor" are at risk of falling back into poverty in the event of sickness, natural disaster, harvest failure, rising food prices, or economic recession. They also have extremely limited access to basic services (e.g., health and education), capital, and infrastructure. The incidence of

poverty continues to be much higher in rural areas (17.4%) than in urban areas (10.7%). The Government of Indonesia has made poverty reduction a priority. Its Medium-Term Development Plan (RPJM) 2004 2009 provides strategic directions for addressing poverty and achieving the Millennium Development Goals (MDGs). The Government has also issued a poverty reduction action plan in line with the National Poverty Reduction Strategy (SNPK), which emphasizes increasing employment opportunities and accelerating poverty reduction. To promote further inclusive growth, the Government launched a nationwide poverty reduction program in August 2006: the National Program for Community Empowerment (PNPM Mandiri). PNPM Mandiri aims to reduce poverty by promoting community participation in development planning and management, and delivery of basic services to achieve the MDG targets by 2015. ADB's Indonesia country strategy and program, 2006 2009 concludes that the country's principal challenge continues to be poverty reduction and eliminating the vulnerability of large sections of the population. To meet this challenge, the Government must achieve higher levels of sustainable economic growth, improve public sector management, boost development spending, and accelerate progress toward achieving the MDGs. Strengthening institutional and human capacities at all levels is needed to realize the development objectives and improve social service delivery. ADB's growing experience with community-based projects places it in a strategic position to support the Government in scaling up and effectively implementing the PNPM Mandiri Program.

Impact Reduced poverty and improved local governance in Program Nasional Pemberdayaan Masyarakat (National Program for Community Empowerment ) (PNPM) Mandiri areas
Project Outcome
Description of Outcome Improved access to service delivery and basic rural infrastructure for the poor, near poor and women in the project communities.
Progress Toward Outcome

Project implementation has been progressing as scheduled.

The loan will be closed on 30 September 2013, as originally scheduled.

Civil works have been completed. The quality of completed works is considered good. The project has benefited more than 600,000 households, of which about 296,000 are poor households in 1,500 villages.

Implementation Progress
Description of Project Outputs

Strengthened capacity for community planning and development

Improved village services and infrastructure through community development grants

Improved Capacity for Project Implementation and Monitoring and Evaluation

Status of Implementation Progress (Outputs, Activities, and Issues) About $76.1 million from loan proceeds and Rp26 billion equivalent to about $2.7 million, from government budget, have been distributed to the targeted villages. In total, 1,500 villages received block grants. Of the 1,500 villages; 1,495 villages received two cycles of block grants and the other 5 villages received only one cycle of block grants. The following chart highlights the distribution of block grants by type of infrastructure (for the two cycles of block grants).
Geographical Location Indonesia
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects The project is categorized as environmental category B. The initial environmental examination was prepared for sample infrastructure intervention. As the project follows a sector-like approach, the environmental assessment and review framework has been prepared to guide each of the project villages to carry out envionmental screening during village/ rural infrastructure formulation and facilities compliance with the environment requirements of the Government of Indonesia and ADB during project implementation.
Involuntary Resettlement The scope of land acquisition and resettlement (LAR) for the project is not significant. Due to the community-driven development (CDD) nature of the process, in which project activities will directly benefit communities and involve community decision-making and management, safeguards will be built into the community decision-making process deal with issues as they arise. The project will require limited land acquisition for very small community facilities and will not involve any resettlement of people, relocation of houses, or significant impact upon productive land or other productive assets.
Indigenous Peoples The Project will include indigenous peoples among its beneficiaries. Because the project will not generate negative impacts and will be based fully on CDD principles, its compliance with ADB's policy on Indigenious Peoples (1998) will be ensured by the project design and implementation mechanisms. The selcection criteria for investments include provisions to ensure that indigenous peoples and other vulnarable groups are part of the capacity building, planning, implementation and post-implementation processes; and that they will benefit proportionally from easier access to rural infrastructure, training and construction-related jobs.
Stakeholder Communication, Participation, and Consultation
During Project Design During project preparation, regular consultations were held with key stakeholders (e.g. government officials and non government staff at national, provincial, and district levels, community leaders, and development partners).
During Project Implementation The Project is designed to maintain board stakeholder participation. It supports community empowerment and strengthen local capacity to implement priority programs. The Project includes assistance to (i) conduct an awareness campaign to familirize the community members with the project; (ii) conduct community facilitation including poverty mapping in villages, identification of problems and needs, evaluation of community implementation capacity, and development of planning mechanism and decision-making processes; (iii) assist in the establishment abd capacity building of community implementation organizations; (iv) assist communities to formulate village medium-term poverty reduction plans and community project proposals for funding by block grants; (v) provide technical guidenance in the implementation of the Project; and (vi) assist communities to formulate and implement operation and maintenance (O&M) plans to ensure sustainability of completed facilities.
Business Opportunities
Consulting Services

All consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). The national training design and management team will consist of three consultants to be contracted as individuals. The firm for impact evaluation will be contracted through quality- and cost-based selection using simplified technical proposal. The management consultants will be recruited through national firms. The fixed budget selection method, which requires submitting a simplified technical proposal within 35 days, will be used to select the management consultants and the nongovernment organization (NGOs) for external monitoring. The fixed budget selection method is justified to ensure recruitment of highly competent consulting firms with the required mix of specialties, the demand for which has increased considerably because of PNPM Mandiri. The terms of reference of project management consultants will follow the format and contents of those developed under PNPM Mandiri.

The PPIUs will recruit community facilitators to provide about 26,000 person-months of services. The community facilitators will be recruited as individuals. As they will be financed by counterpart funds, Government procedures will be followed.

Procurement All procurement to be financed under the ADB loan will be carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). Civil works for village investments will be contracted out to the communities based on an agreement between a community implementing organization (CIO) and a district project implementation unit (DPIU), and in compliance with the requirements for community participation in procurement as specified in ADB's Procurement Guidelines. Community contracts, to be based on the format of the community contracts under the overall PNPM Mandiri, will include evidence of community facilitation, the design of facilities to be constructed under the contract, a community operation and maintenance (O&M) plan for these facilities, and clear duties and responsibilities of both parties for the project activities. The first two community contracts in each participating province will be submitted to ADB for prior approval. All contracts will be monitored under the management information system.
Responsible ADB Officer Siti Hasanah
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
Ministry of Public Works
Mr. Antonius Budiono
Fax 6221 7279 6585
Jl. Pattimura No. 20 Kebayoran Baru, Jakarta, Indonesia
Concept Clearance 22 Jun 2009
Fact Finding 22 Jun 2009 to 03 Jul 2009
MRM 30 Jul 2009
Approval 12 Nov 2009
Last Review Mission -
PDS Creation Date 16 Mar 2006
Last PDS Update 19 Sep 2013

Loan 2575-INO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Nov 2009 10 Dec 2009 01 Feb 2010 30 Sep 2013 - 20 Feb 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 113.54 Cumulative Contract Awards
ADB 84.24 12 Nov 2009 83.13 0.00 100%
Counterpart 29.30 Cumulative Disbursements
Cofinancing 0.00 12 Nov 2009 83.13 0.00 100%

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Rural Infrastructure Support to the PNPM Mandiri Project II Environmental Assessment and Measures Aug 2009
Rural Infrastructure Support to the PNPM Mandiri Project II Environmental Assessment and Review Framework Jul 2009
Rural Infrastructure Support to the PNPM Mandiri Project II Resettlement Planning Documents Jul 2009

Evaluation Documents

See also: Independent Evaluation
Title Document Type Document Date
Indonesia: Rural Infrastructure Support to the PNPM Mandiri Project II Validations of Project Completion Reports Sep 2015

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