WASHINGTON D.C., June 20, 2019 – On June 19, 2019, the World Bank Board of Executive Directors approved a $150 million loan to finance the reconstruction and strengthening of housing and public facilities affected by the September 2018 tsunami and earthquake in Central Sulawesi. The financing will support the Government of Indonesia’s efforts in rehabilitation and reconstruction of the region and help reduce human and economic losses from future natural disasters.
Financed by this new loan, the Central Sulawesi Rehabilitation and Reconstruction Project (CSRRP) will improve building performance and sustainability of critical public facilities and housing settlements. Project beneficiaries include 170,000 internally displaced persons and approximately 7,000 disaster-affected households from the area. The project will also build the capacity of government and implementation partners to ensure quality construction practices and compliance with standards, while also meeting local communities’ needs.
Located in the Pacific Ring of Fire with 127 active volcanoes, Indonesia is one of the most disaster‑prone countries in the world. Natural disasters have adverse results on the people and economy, often having an impact on national development outcomes. Between 2007 and 2018, disasters caused more than 7,300 fatalities and displaced 55 million people, with annual economic losses of approximately $2.2 to $3.0 billion. The Central Sulawesi earthquake and tsunami caused approximately 4,000 fatalities and economic losses of $1.3 billion, or 13.7 percent of the region’s GDP.
“Indonesia’s consistent efforts in growing its economy and reducing poverty have shown positive results. Although urban areas play a key role in this progress, rapid growth and transformation of cities often make them more vulnerable to natural disasters and the impacts of climate change,” said Rodrigo A. Chaves, World Bank Country Director for Indonesia and Timor-Leste. “Strengthening the housing stock and building practices is an important part of disaster management strategy.”
When towns and cities grow in the absence of carefully-managed infrastructure development and risk-informed planning, the concentration of people and assets can create disaster “hotspots”. In Central Sulawesi, the urban share of the population is expected to grow from 24.3 percent in 2010 to 43.1 percent in 2035. To address this, the CSRRP will support targeted communities with reconstructed and strengthened housing and public facilities.
“The design of public facilities will follow the inclusive design principles outlined in the Government’s Master Plan, particularly those that address climate change and the needs of people with disabilities, women, and children. The program will also complement infrastructure construction and recovery activities financed by the government in the region, other World Bank-financed projects, and development partners,” said George Soraya, World Bank Lead Municipal Engineer and Team Leader of this project.
The World Bank’s support to Indonesia’s service delivery is a key component of the World Bank Group’s Country Partnership Framework for Indonesia, which focuses on government priorities for transformational development impact, including reducing disaster risk.