News World World Bank issues $US1 billion loan for Indonesian disaster recovery

World Bank issues $US1 billion loan for Indonesian disaster recovery

Indonesian authorities estimate it will take two years to rebuild the city of Palu. Photo: Getty
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The World Bank will provide up to $US1 billion ($1.4 billion) in loans to Indonesia to help relief and reconstruction efforts in areas hit by recent deadly earthquakes and a tsunami.

The loan package could include cash transfers to the poorest 150,000 families affected by the devastating earthquakes that hit Lombok and Sulawesi islands in August and September, respectively, for a period up to one year, the World Bank said.

The funding will be available at the request of the Indonesian government, it said at the end of the annual meetings of the International Monetary Fund-World Bank in Bali, Indonesia.

The death toll from the two earthquakes and subsequent tsunami that hit Central Sulawesi province on September 28 stands at nearly 2100.

Hundreds, if not thousands, more are still missing in Central Sulawesi after their homes were swallowed by mud in a phenomenon known as soil liquefaction.

The August 5 earthquake that struck Lombok killed more than 560 people.

The government declared the end of the national search for victims of the Sulawesi disaster on Friday.

On Friday World Bank chief executive Kristalina Georgieva and UN Secretary General Antonio Guterres visited the Central Sulawesi capital Palu, which bore the brunt of the disaster.

“It is humbling to see the devastation and hear the stories of those who have been affected,” Georgieva said. “The best memorial to those who lost their lives is build back better.”

The loan could also include a new emergency recovery program to finance the rebuilding of critical public facilities and infrastructure such as hospitals, schools and bridges, the bank said.

It would also strengthen monitoring and early warning systems, and help to finance the reconstruction of housing.

“Restoring lives and livelihoods of the people affected by natural disasters is the government’s utmost priority,” Indonesian Finance Minister Sri Mulyani Indrawati said in the World Bank’s statement.

The World Bank estimates physical losses caused by the disaster in Central Sulawesi at $US531 million.