US Doubles Development Assistance to Indonesia with USD649 Million Grant

The United States (US) has welcomed the launch of the USD649 million Indonesia Infrastructure and Finance Compact.

IDXChannel - The United States (US) has welcomed the launch of the USD649 million Indonesia Infrastructure and Finance Compact, a five-year grant between the Millennium Challenge Corporation (MCC), a US government foreign aid agency, and the Government of Indonesia. 

The MCC grant is expected to double US development assistance to Indonesia over the next five years, augmenting development assistance from the US Agency for International Development (USAID) of approximately USD130 million annually.

“The focus of this compact — blended finance for public infrastructure, and access to finance for women-owned small businesses — is a testament to the ingenuity and sophistication of the U.S.-Indonesia partnership,” said US Ambassador to Indonesia Kamala S Lakhdhir in a media release on Thursday (5/9/2024).

 “Indonesia needs trillions of dollars of investment in clean and sustainable infrastructure to support its rapidly growing economy. Mobilizing private capital through blended finance will be critical," Lakhdhir said,

According to the Ambassador, MSMEs are the backbone of Indonesia’s rapidly growing economy, and the vast majority are owned by women. Better access to finance will help them grow their small businesses.”

Joining Lakhdhir at a September 4 launch event in the Energy Building in Jakarta’s Sudirman Central Business District were: MCC Vice President for Compact Operations Cameron Alford; Indonesian Deputy Minister of Finance Thomas Djiwandono; Ministry of National Development Planning/Bappenas Secretary Teni Widuriyanti; and Maurin Sitorus, the executive director of MCA-Indonesia II, which will implement the Compact on behalf of the Government of Indonesia.

The MCC compact, which includes a USD49 million co-investment from the Government of Indonesia in addition to the USD649 million MCC grant funding, will assist the Government of Indonesia in improving access to infrastructure financing —particularly transport and logistics infrastructure—and support for women-owned small businesses. 

This project, developed in close coordination with Indonesia, furthers US efforts to build climate-resilient transportation infrastructure and support Indonesia’s development goals while contributing to the objectives of the Partnership for Global Infrastructure and Investment. (Wahyu Dwi Anggoro)