Indonesia: $250 million for housing, land & communities by Multi-Donor Trust Fund for Aceh and North Sumatra

Jakarta, Tuesday, May 10, 2005 - At its first meeting today, the Steering Committee of the Multi-Donor Trust Fund for Aceh and North Sumatra approved project concepts for $250 million in grant financing. The Committee gave the green light for the detailed development of projects to provide housing, land rights and community facilities for the earthquake and tsunami-affected people of Aceh and Nias.

The Multi-Donor Trust Fund for Aceh and North Sumatra is a pool of at least $500 million in grant resources provided by donor countries to support the implementation of the Government's rehabilitation and reconstruction blueprint. Donors include the European Commission, The Netherlands, the World Bank, Norway, Denmark, Sweden, the Asian Development Bank, Canada, and others. The Trust Fund is managed by the World Bank and guided by a Steering Committee consisting of donors, Government of Indonesia and civil society representatives, with participation by the United Nations and the international NGO communities.

The four project concepts approved today are:

Housing for a Thousand Villages (US$150 million) -- as part of the Government's larger settlement reconstruction strategy, this two-year program would finance the construction of 20,000 new houses and rehabilitation of 30,000 damaged houses along with related infrastructure in one thousand communities

Recovery of Property Rights (US$28 million) -- this project will help to sort out land ownership through urgent recovery of land records, establishment of a land occupancy databases and rehabilitation of the land administration system throughout Aceh (up to 300,000 parcels of land)

Community Recovery in Rural Areas (US$54 million) -- this addition to the Kecamatan Development Program will support full restoration of community infrastructure in 200 kecamatan (up to 3000 villages), recapitalization of up to 6000 micro-enterprises and training of thousands of villagers

Community Recovery in Urban Areas (US$18 million) -- this addition to the Urban Poverty Program will rehabilitate and develop community-based infrastructure in 352 kelurahan through the construction of roads and bridges, schools, water supply and sanitation, community buildings, and drainage Kuntoro Mangkusubroto, Director of the Rehabilitation and Reconstruction Executing Agency For Nanggroe Aceh Darussalam and Nias islands (Badan Rehabilitasi dan Rekonstruksi / BRR) and co-chair of the Steering Committee, said "The key to rapid recovery in Aceh and Nias is coordination of initiatives by key stakeholders. The Multi-Donor Trust Fund is an appropriate forum for this coordination to take place with donors." Andrew Steer, World Bank Country Director and co-chair of the Steering Committee, stated "The decisions made today will reach to every corner of the devastated areas through a thousand community facilitators, building houses in a thousand communities and assisting 6000 small businesses get back on their feet." Jean Breteché, Ambassador and Head of the European Commission Delegation and co-chair of the Steering Committee, said "As the largest contributor to the trust fund, we are pleased that it is relevant and responsive, trying to meet its objective of maximizing speed, efficiency and sound financial management to meet the urgent needs of affected people."

Teams of Government officials and other experts will now work with stakeholders in Aceh and North Sumatra to finalize these projects. At the same time, the BRR and others are exploring how to speed up the flow of grant funds through Treasury to affected communities.