The Asian Development Bank (ADB) is prepared to provide US$800mn-US$900mn in new loans to Indonesia in 2006, and US$1bn-US$1.1bn in 2007, says Edgar Cua, ADB’s country director in Indonesia.

The funds will be sourced from ADB’s ordinary capital resources and its concessional funding window.

“This proposed scale of assistance is a vote of confidence in Indonesia’s macroeconomic performance and the government’s commitment to policy reforms. Our support will focus on infrastructure and social sectors, with the aim of increasing public and private investment in development,” says Cua.

The consultative group on Indonesia, including ADB and other development partners, have recently met to assess the country’s needs and formulate the best forms of financial assistance. Indonesia came to the meeting in a relatively stronger position than in years past. “The government’s macroeconomic management has helped bring the country’s economic indicators back to favourable pre-1997 Asian financial crisis levels,” says Cua.

ADB is also assisting with the country’s reconstruction needs after the May 27 earthquake with an initial offer of US$10mn in immediate grant assistance and US$50mn reprogramming of ongoing soft loans, for a total of US$60mn.

ADB has worked closely with the government of Indonesia and development partners to assess the damage caused by the earthquake, and coordinates with other donors and organisations to provide the most effective assistance.

Indonesia is a founding member of ADB and its sixth largest shareholder.

By the end of 2005, it had received 272 public sector loans amounting to US$20.7bn, along with 480 technical assistance (TA) projects amounting to US$240.449mn. Measured by public sector loan approvals, Indonesia is ADB’s largest client, and its second largest recipient of TA support.