Indonesia

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What are we funding?

 

GRANT AMOUNT

ENDORSEMENT DATE

ACTIVITIES

INSTRUMENTS SUPPORTED

WB PROJECT

US$25 million

August 24, 2020

Funding the start-up and operating costs of a US$500 million Pooling Fund for Disaster (Pooling Fund Bencana, PFB), the country’s central mechanism for financing disaster preparedness and response, and the cornerstone of its 2018 DRF strategy.

  • Contingency fund (under design, 2025)
  • Macro/sovereign insurance for state assets (2019–2023; 2023–2026)
  • Macro/sovereign risk transfer (planned, TBD)
     

Indonesia Disaster Risk Finance & Insurance (P173249)
 

US$ 500M (approved on January 21, 2021)

US$8 millionNovember 16, 2023Activities supported by the grant aim to safeguard SMEs in the event of disasters; the grant stimulates lending in green SME markets by embedding a resilience mechanism within Indonesia’s KUR, a government subsidy scheme for SMEs.    Resilience mechanism within an existing government support program for SMEs (expected date TBD) 

  • Indonesia has steadily increased its use of DRF over the years and in 2018 completed a comprehensive disaster risk finance and insurance strategy. Among the priorities outlined in the strategy are protection of state assets and protection of the state budget.

  • A US$14 million GSFF grant is funding the start-up and operating costs of a US$500 million Pooling Fund for Disaster (Pooling Fund Bencana, PFB), the country’s central mechanism for financing disaster preparedness and response, and the cornerstone of its 2018 DRF strategy. 

  • The pooling fund serves multiple purposes and will be used to finance disaster preparedness activities, provide contingency funding for emergency response, fund new DRF instruments, and renew and expand the existing state assets insurance program (Program Asuransi Barang Milik Negara, ABMN). 

  • Since its inception in 2019, ABMN has provided total coverage of US$2.4 billion. The program is expected to be renewed and expanded in future to cover additional insurable infrastructure assets.

  • In FY24, GSFF Steering Committee members endorsed a proposal for a US$8 million GSFF grant to cofinance a World Bank program for a project currently under preparation. 

  • Activities supported by the grant aim to safeguard SMEs in the event of disasters; the grant stimulates lending in green SME markets by embedding a resilience mechanism within Indonesia’s KUR, a government subsidy scheme for SMEs. The resilience mechanism will be associated with a new green KUR window that aims to increase sustainable lending to SMEs and incentivize activities that contribute to greening; the mechanism will provide lenders with emergency liquidity, allowing them to offer new or restructured loans to eligible SMEs. 

  • The resilience window is expected to benefit 1 million SMEs affected by climate shocks. 

  • Grant activities emphasize the provision of loans to women-owned SMEs. 

  • The project is set to go to the World Bank Board of Directors for approval in Q1 FY26

 

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