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FEATURE STORY

Economic Development Financing Facility (EDFF) Project for Aceh

July 29, 2010


STORY HIGHLIGHTS
  • The Project's main goal is to finance programs that could help create a thriving business environment, a strong private sector and adequate public infrastructure to support the economy in Aceh
  • The Aceh government will manage the facility, in collaboration with the Ministry for the Development of Disadvantaged Areas

Banda Aceh, July 29, 2010 – Four international NGOs operating in Aceh, all in partnership with Acehnese organizations, have signed block grants worth a combined total of US$ 22.7 million for projects designed to help boost the local economy. The four groups are part of the first phase of a new special grants program called the Economic Development Financing Facility, in which block grants ranging from US$ 3.5 million to US$ 6.8 million have been earmarked for projects in economic integration and market access, including cocoa, rice, emping chips business development and capacity building for smallholders in the livestock and fisheries sector.

The Economic Development Financing Facility was established using a US$ 50 million grant from the Multi Donor Fund for Aceh and Nias, which is managed by the World Bank. The facility’s overarching goal is to finance programs that could help rebuild the economy in post-tsunami Aceh in a sustainable and equitable fashion.

Nearly six years after the tsunami disaster, Aceh is essentially a new province built back better and now running under the management of a capable provincial government. The challenge of reconstruction has now been replaced by the challenge of economic restoration. Reconstruction projects are what have largely kept Aceh’s economy afloat over the past five years. With reconstruction now near completion,
Aceh’s ambition is to have a thriving business environment, a strong private sector and adequate public infrastructure to support the economy. Financial resources, however, are limited and the Economic Development Financing Facility is a way of bringing Aceh closer to reaching its objectives.

The facility is managed by the Aceh government, in collaboration with the Ministry for the Development of Disadvantaged Areas, and will finance a series of projects totaling up to $44.5 million using a US$ 50 million grant from the Multi Donor Fund. This amount has been broken down into smaller block grants, awarded to a number of organizations considered to have:

submitted proposals that fall in line with the Aceh government’s medium-term development plans and the BAPPENAS (National Development Planning Agency) blueprint for Aceh’s recovery

combined the expertise and local networks of Acehnese organization and human resources  with the international best practice offered by international NGOs

The organizations that have signed their agreements are all foreign aid groups that have joined forces with local partners. They are:

Canadian Cooperative Association and LSM PASKA (NGO for the Development of Social Economic Activities in Aceh)

Action AID  Australia and Keumang (a local NGO)

Swisscontact with international and local private sector partners

Muslim Aid with  Syiah Kuala Univesity and local livestock authorities

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Variety products of local Aceh. EDFF program in Aceh
will help to boost the local economy.

Another four organizations are finalizing the details of their projects guided by the provincial government, and it is expected that these NGOs can also start implementation of their projects very soon.

The above grant recipients will be supervised by a Project Management Unit comprised of Aceh government officials, with general oversight by the Ministry for the Development of Disadvantaged Areas and the World Bank as the partner agency for the project.

The Multi Donor Fund for Aceh and Nias represents a pool of over US$685 Million in grant resources, provided by donor countries and International Organizations to support the implementation of the Government’s rehabilitation and reconstruction process. The facility was established in close cooperation with the BRR (Aceh Reconstruction and Rehabilitation Agency). Since the BRR’s closing in April 2009, the function has been transferred to BAPPENAS. Contributing donors include the European Commission, the Netherlands, the United Kingdom, Canada, the World Bank, Sweden, Norway, Denmark, Germany, Belgium, Finland, the Asian Development Bank, the United States of America, New Zealand, and Ireland.

 


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