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eddah-based Islamic Development Bank (IDB) will provide between US$3 billion and $3.3 billion in soft loans up to 2014 to support the development of regions outside Java and Bali, a top executive says.

IDB president Ahmed Mohamed Ali said in Jakarta on Wednesday that the loans would be used to finance the development of not only infrastructure but also human resources outside Java and Bali, which have in recent years enjoyed a significant increase in direct investments from the private sector.

“About two-thirds of the loans will be targeted to support emerging developmental opportunities, both in the public and private sectors, in Sumatra, Kalimantan and Sulawesi regions,” Ali said in his speech delivered at the celebration of the IDB-Indonesia 30 years mutual partnership at the Ritz-Carlton Pacific Place.

The loans will be made through the “Member Country Partnership Strategy [MCPS] for the Republic of Indonesia” program over the period of 2011 to 2014, which is aimed at achieving “balanced and inclusive growth” by stimulating investment and jobs creation in Indonesian regions in five work program areas covering education and health, infrastructure and energy, poverty alleviation, agriculture and rural development, and cross-sector issues.

The funds will be 34.7 percent distributed to private sector development, 26.3 percent to infrastructure projects, 19.8 percent to education and skills improvement programs and facilities, and 17.5 percent to agricultural and rural development, the IDB said in a press statement.

“As a development partner of Indonesia, we have noted that devolution of governance to regions and provinces is a key pillar for achieving regionally balanced growth. This pillar has led to a transfer of an unprecedented volume of resources to the provincial governments aimed at investing in human and infrastructure development,” Ali said.

A study commissioned by the IDB on conditions of growth, poverty and challenges in Sumatra, Kalimantan and Sulawesi regions in Indonesia found that regional disparities in Indonesia could not be resolved simply by relying on natural resources to develop economic activities.

“Policy support and public investment to provide low-cost access to electricity, skilled labor and regional connection are required to attract new industries,” the IDB said in an official statement issued on Wednesday.

National Development Planning Minister Armida Alisjahbana, who also attended the IDB event, said the government would lay out a strategy to fully optimize the financing facility. “It needs to be laid out altogether, but we will contribute more ideas because it needs to be in line with [Indonesia’s] priorities.”

“Examples [of the investment] include public university development such as the [State Islamic University], and food security, agriculture, health and infrastructure such as that at Belawan Port,” Armida said, highlighting the nation’s dire need for more infrastructure.

Indonesia is one of the 22 founding member countries of the IDB in 1975 and one of the 56 member countries that the IDB has cumulatively recorded net approvals of its development assistance totaling $73.2 billion. By the end of March 2011, the IDB Group provided a total funding of approximately $2.5 billion for 159 projects in various sectors.