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IDB Group to fund RI development projects worth US$5.2 billion
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Columbia University economist Jeffrey Sachs gives a presentation on Sustainable Development Goals (SDG) at the 41st Annual Meeting of the Islamic Development Bank in Jakarta on May 16. (thejakartapost.com/Anton Hermansyah)
T
he Islamic Development Bank (IDB) Group has indicated a tentative financing of US$5.2 billion for the implementation of its member country partnership strategy (MCPS) for Indonesia during 2016-2020.
IDB Group board of governors chairman, who is also Indonesian Finance Minister, Bambang Brodjonegoro said Indonesia and the IDB had managed to complete their first MCPS for the period of 2011-2014 and were successful in financing key development areas, such as infrastructure and private sector development.
"This success is expected not only to be replicated [in other areas], but also needs enhancement in the upcoming MCPS of 2016-2019," Bambang said during the opening ceremony of the IDB Group’s 41st annual meeting on Tuesday night.
Under the theme, “Supporting Smart, High and Inclusive Growth,” Bambang said the strategic cooperation plan to be launched during the group’s annual meeting, would involve many key areas, based on Indonesia's medium term development plan (RPJMN) of 2015-2019.
"These priority areas include energy, transportation, urban development, higher education and skill development, private sector development, Islamic finance expansion and regional integration," he explained.
Of the total $5.2 billion fund, the IDB Group's Ordinary Capital Resources will provide $3.2 billion, while the remaining $1.8 billion and $200 million will come from IDB Group entities the International Islamic Trade Finance Corporation (ITFC) and the Islamic Corporation for the Development of the Private Sector (ICD), respectively.
Separately, the Islamic Corporation for Insurance of Investment and Export Credit plans to provide $400 million, while the Islamic Research and Training Institute plans to support several capacity-development programs in the areas of Islamic banking and finance.
The major outcome in the IDB Group’s intervention is expected to help the government achieve its target of providing greater access to affordable, reliable and sustainable energy, particularly increasing the electrification ratio as well as increased accessibility, capacity and connectivity to the road network and the reduction of travel times.
Other outcomes expected from the intervention include increased access to clean water and sanitation for poor people in various regions, in addition to improved quality of higher and Islamic education, and enhancement of technological readiness of public and private institutions.
IDB Group president Ahmad Mohamed Ali said the amount of funds provided by the IDB Group since its establishment amounted to $113 billion, including $12 billion in 2015.
"Cooperation is the main purpose of the IDB Group’s establishment with no purpose other than collective action, which is very much needed at this time," he said.
He highlighted several key initiatives, such as the development of the Trans-Sahara road, the Manantali dams, food security programs in African countries, the construction of a railway linking Iran, Kazakhstan and Turkmenistan, in addition to projects in the field of energy and other infrastructure in remote areas in Africa, Central Asia and other regions.
However, he admitted that challenges remained on the need for systemic enhancement in order to help countries to move to a knowledge-based economy that aims to improve the system of education, information and communication technology, innovation, good governance and institutional systems. (dmr)
