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ADB provides $500-million loan to help Indonesia downsize SOEs
The Asian Development Bank has approved a US$500 million loan to support Indonesian government efforts aimed at improving the efficiency, resilience and corporate governance of state-owned enterprises (SOEs).
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Garlands and signs are seen outside the SOEs Ministry in Jakarta on Dec. 6, 2019. The items were sent to the ministry following the SOE minister’s move to dismiss then-Garuda Indonesia president director Ary Ashkara. (JP/Dhoni Setiawan)
T
he Asian Development Bank has approved a US$500 million loan for the Indonesian government to reform state-owned enterprises (SOEs) in the country with the aim of improving their efficiency, resilience and corporate governance.
The program will support efforts to reduce the number of SOEs and require them to focus on core operations, so that they can be financially viable and efficiently provide essential public services.
Other areas include measures to improve the quality of SOE boards, strengthen financial monitoring and disclosure, and help SOEs transition to a climate-compatible business model.
The German development-bank KfW will provide co-financing with a loan equivalent of €300 million (US$310 million).
“SOEs can play a vital role in fostering inclusive and sustainable recovery from the COVID-19 pandemic in Indonesia,” ADB senior public-management specialist for Southeast Asia Yurendra Basnett said in a statement on Friday.
“But to deliver greater value to the public, their structural weaknesses must be addressed,” he added.
Read also: Forget protection: Jokowi tells SOEs to get out of their comfort zone
