Indonesia got loan support to accelerated infrastructure delivery

News Hour:

The Asian Development Bank (ADB) has approved a $148.2 million technical assistance loan to support Indonesia’s bid to accelerate infrastructure delivery through improved engineering services.

“The project will help the Ministry of Public Works and Housing (MPWH) improve the design and implementation of its increased public investment program,” said Sona Shrestha, Deputy Country Director at ADB’s Indonesia Resident Mission. “With a stronger public investment management system, the ministry should be well positioned to speed up the delivery of high quality infrastructure projects.”

Inadequate infrastructure has made doing business difficult in Indonesia, hampering inclusive growth and poverty reduction efforts. But while the government has increased its infrastructure program to $365 billion for 2015-2019, including $106 billion at the national level, the infrastructure delivery capacity of the MPWH — responsible for around 47% of the national government’s infrastructure program — remains constrained by weak project preparation and poor infrastructure planning and delivery systems.

The Accelerating Infrastructure Delivery through Better Engineering Services (ESP) project will help MPWH support the preparation, design, and delivery of around 40 projects in irrigation, flood management, water supply and sanitation sectors, as well as dams and national roads development. The project is an integral part of ADB’s support under the bank’s Country Partnership Strategy for 2016–2019 with Indonesia to accelerate infrastructure delivery.

ESP will also improve MPWH’s capacity to manage public investment through enhanced planning, survey methodologies, design standards, value engineering, as well as technical and financial assessments during construction. It will also support MPWH in developing and implementing improved multi-year contracting for civil works, asset management, environment and social safeguards, and procurement systems.

“It is the first ADB-supported project that is fully dedicated to the preparation of an infrastructure project pipeline according to government requirements,” said Aziz Haydarov, Infrastructure Economist at the Indonesia Resident Mission. “ESP will use the government’s e-procurement platform in engaging with consulting firms for project preparation.”

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.

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