The World Bank has granted Indonesia on Monday a loan worth $49.6 million. The loan will help the Southeast Asian nation with its plan to integrate city planning across the country.
The amount will help the Indonesian government to finance its project called the National Urban Development Project (NUDP). NUDP aims to reap the benefits of urbanization. Furthermore, the program’s main objective is to increase the number of participating cities carrying out integrated planning and prioritizing their capital investments.
Indonesia has one of the fastest urbanization growth in Asia. About 54 percent of its population lives in urban areas, according to the United Nations. Also, this is expected to increase to 68 percent by 2025.
The World Bank’s board of executive directors approved the loan on Monday. It will benefit about 12.5 million people living in 13 cities across Indonesia, as well as those municipal agencies. Rudy Prawiradinata, National Development Planning Agency (Bappenas) deputy for regional development said, “helping municipal governments integrate spatial planning with capital investment planning will help cities become drivers of prosperity for the country’s fast-growing urban population”.
The government’s NUDP will also develop high-quality urban planning data and studies. That will assist governments to make better capital investments across sectors and enhance their ability to access alternative sources of financing. Rodrigo A. Chaves, World Bank country director for Indonesia and Timor-Leste, said, “this project will cause more effective financing of infrastructure to make cities more livable and productive”.
Climate Change in Indonesia
Additionally, the combination of high population density and high levels of biodiversity makes Indonesia vulnerable to climate change. Chaves said the program will enhance the links between the country’s planning and infrastructure development. Thus, it will improve investments and reduce the vulnerability to climate-related hazards by directing development toward lower risk areas.
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