The Board of Directors of the Asian Infrastructure Investment Bank (AIIB) has approved a USD250 million loan to improve irrigation services and management accountability in Indonesia.

The project, cofinanced with the World Bank, aims to rehabilitate, revitalize and modernize water resources and irrigation systems in Indonesia. It also seeks to strengthen irrigation institutions and management and improve the operation and maintenance of these systems.

The project will benefit more than 887,000 farmer households headed by males or females. They stand to get more reliable, climate-resilient and efficient irrigation water supply and distribution as well as increased agricultural productivity through improved irrigation water management and climate-smart agricultural interventions.

"Improving irrigation infrastructure in Indonesia will support and complement the government’s food security and sustainable agriculture development efforts," said AIIB Vice President and Chief Investment Officer D.J. Pandian. "This project shows AIIB’s commitment to support economic growth and socioeconomic development in Indonesia, the largest economy in South East Asia."

The project consists of three components:

• Urgent Rehabilitation of Irrigation and Drainage System—Supports institutional strengthening and rehabilitation of 100,000 hectares of irrigated areas to overcome the deterioration of irrigation practices.
• Strategic Modernization of Irrigation and Drainage System—Increases serviceability of premium irrigation systems through modernization of management and infrastructures by introducing better technologies. The focus will be on 176,000 hectares of the Jatiluhur irrigation system in West Java.
• Project Management—Provides support services for timely and effective project implementation, including monitoring and evaluation, procurement, financial management and safeguard compliance.

"This project will improve and upgrade existing water resource and irrigation infrastructure which is the backbone of Indonesia’s agriculture and staple food supply," said AIIB Director General of Investment Operations Supee Teravaninthorn. "It will directly contribute to inclusive and sustainable socioeconomic growth in the country. The project is aligned with AIIB’s mandate to promote social and economic development in Asia through investment in infrastructure."

Additional information and the project’s Environmental and Social Management Plan can be found at here.

About AIIB

The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond. Headquartered in Beijing, we commenced operations in January 2016 and have now grown to 87 approved members from around the world. By investing in sustainable infrastructure and other productive sectors today, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.