Indonesia careful about accepting loan offer for Palu, Lombok reconstruction

Indonesia careful about accepting loan offer for Palu, Lombok reconstruction

Vice President Jusuf Kalla (fifth from left), along with UN Secretary General Antonio Guterres (center) and World Bank CEO Kristalina Georgieva (fourth from left) and Chief of the National Disaster Mitigation Agency (BNPB Willem Rampangilei (third from left) inspect an earthquake-stricken area and soil liquefaction in Balaroa, Palu, Central Sulawesi on Friday (Oct (12, 2018). (ANTARA FOTO/Wahyu Putro A/pras.

Jakarta, (ANTARA News) - The Indonesian government is careful about accepting a loan offer from international financial institutions to finance the reconstruction of buildings damaged due to natural disasters in Palu City and Lombok Island, Vice President Jusuf Kalla stated.

"We will consider the offer, as our funding needs will not be as much as (the loans offered). We must be careful to accept the loan offer, but under these circumstances, we are grateful for it," Kalla noted at the Vice Presidential Office here on Tuesday.

The government is still calculating the total losses due to a magnitude 7.0 earthquake that hit the island of Lombok, West Nusa Tenggara Province, and a magnitude 7.4 earthquake, tsunami, and soil liquefaction in the city of Palu and the district of Donggala, Central Sulawesi Province.

The total losses will serve as a basis for the calculation of state budget allocations for the reconstruction of damaged buildings, he stated.

"We will consider the offer and calculate our funding needs. Surely, the offer is long-term loans that will become due in more than 30 years. Admittedly, the offer is more interesting than the state budget fund. However, we must not exaggerate it," he noted.

The offer from international financial institutions, including the World Bank and Asian Development Bank, is different from that received during the reconstruction of houses damaged due to a powerful earthquake and subsequent tsunami in Aceh in 2004.

"There is a difference between Aceh and Lombok (and Palu). We received grants in Aceh," he stated.

The World Bank and Asian Development Bank have offered loans worth US$1 billion each to Indonesia for the reconstruction of damaged buildings in Lombok and Palu.

The World Bank and Asian Development Bank have pledged $5 million and $3 million in grants respectively for the reconstruction of Lombok and Palu.

Reporting by Fransiska Ninditya
Editing by Suharto, Yoseph Haryadi