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World Bank, China-led AIIB to lend US$200m to Indonesian financing firm
[JAKARTA] The World Bank and the Asian Infrastructure Investment Bank (AIIB) will provide a state-owned Indonesian infrastructure financing firm with loans worth US$200 million for regional development, the World Bank said on Tuesday.
PT Sarana Multi Infrastruktur (SMI) will receive US$100 million from the Washington-based lender under its Regional Infrastructure Development Fund (RDIF), the bank said, adding that the Beijing-based AIIB will provide an additional US$100 million in co-financing.
The funds will boost access to credit to finance infrastructure projects, such as housing, transportation, health facilities and schools.
"Currently, the financing instruments available in Indonesia for local-level infrastructure investments are limited," said Marcus Lee, senior urban economist at the World Bank.
"The RDIF will address the gap for medium- to long-term infrastructure financing, particularly in urban areas across the country."
This is the third co-financing arrangement in Indonesia between the World Bank and the AIIB. Last month, the World Bank approved a US$125 million loan to upgrade more than 140 dams throughout the country.
In July 2016, the World Bank extended financing of US$216.5 million to support the National Slum Upgrading Program, which aims to improve infrastructure in Indonesia's slum areas.