Post-Tsunami reconstruction: Commission finances first long-term activities in Aceh, Indonesia

Brussels, 29 July 2005 - The European Commission has now approved a further contribution of €30 million of its €207 million package to support long-term reconstruction in Indonesia's Aceh province, after the Tsunami. For the first time, Commission funds are contributing to aid coordinated through the Multi-Donor Tsunami Reconstruction Trust Fund, managed by the World Bank. The Commission is the largest contributor to the Trust Fund and one of its co-chairs. The €207 million package pledged by the Commission for Indonesia includes €7 million under the Rapid Reaction Mechanism, already released, to kick-start long-term reconstruction work, and a total of €200 million to be provided through the Trust Fund. This support comes in addition to the Commission's €123 million humanitarian aid assistance to all tsunami-affected countries which started flowing only days after the disaster struck.

Commissioner for External Relations and European Neighbourhood Policy, Benita Ferrero-Waldner, said: "We are amongst the first donors working with the Government of Indonesia to launch the very first projects on long-term rehabilitation and reconstruction in the areas devastated by the tsunami in Aceh and North Sumatra. Immediately after the disaster, humanitarian aid was delivered to the region. Now I am very happy to announce that the reconstruction plans and projects, to which we are contributing substantially, focus on the dispersed communities so that families can return to a normal existence with dignity."

Funds released now will support repair and construction of housing, building up of basic public infrastructure and services, as well as restarting economic activities and securing the livelihoods of affected people. They will also go towards strengthening the capacity of the new Reconstruction Agency and local government in Aceh. This will contribute to better implementation of projects and should also facilitate later arrangements for self-government in Aceh, since a peace agreement has now been reached in Helsinki between the Indonesian Government and the separatist movement GAM.

In addition to its reconstruction package for Aceh, the Commission will establish within the next weeks the Europa House, run by its Delegation in Jakarta. The Europa House will facilitate co-ordination amongst donors on rehabilitation and reconstruction activities, and enhance the policy dialogue with local communities and competent authorities on the ground.

Commissioner Ferrero-Waldner commented: "With the opening of our new Europa House in Aceh in September we will have yet another means to enhance co-ordination and ensure the efficient implementation of projects."

Background to the Indonesia Tsunami Reconstruction Trust Fund

The Indonesia's Multi-Donor Trust Fund (US$ 500 million) aims at maximising efficiency and accountability in the reconstruction of the area after the Tsunami, restarting the livelihoods of affected people, and enhancing the environmental sustainability of coastal and rainforest areas.

The Fund is supported by the Commission and by several Member States, such as the Netherlands, the UK, Sweden, Denmark and Germany, plus contributions from the World Bank, the Asian Development Bank, Norway, Canada, the U.S. and New Zealand.

The Fund has already identified four major projects worth US$ 250 million to provide housing, land rights and community infrastructure, to be implemented soon. The Fund is co-chaired by the Head of the Indonesian Post-Tsunami Reconstruction Agency, the World Bank as Trustee, and the Commission as largest donor, and it closely coordinates with the UN family and other bilateral donors. The Commission's contribution will be disbursed over the coming two years according to needs and performance of the Trust Fund.

The Trust Fund is the central mechanism in the complex reconstruction effort effectively supporting best practices by:

Pooling donor resources to support a mutually-agreed portfolio of projects and programmes, in line with the Government's Master Plan for recovery, thus ensuring national ownership.

Promoting bottom-up and demand-driven development of initiatives by putting the Acehnese at the centre of the process to ensure accountability and sustainability.

Partnering with Government and non-government agencies and serving as a forum for donor coordination.

Supporting a policy dialogue between the international community, civil society and the Government on progress in the recovery process.

Showing zero tolerance for misuse and mismanagement of funds.

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