FOR IMMEDIATE RELEASE Jakarta Stock Exchange Building Tower 2, 12Th Floor (62-21-5299-3000) Contact: Mohamad Al-Arief Royal Netherlands Embassy, Jl

World Bank Office Jakarta FOR IMMEDIATE RELEASE Jakarta Stock Exchange Building Tower 2, 12th Floor (62-21-5299-3000) Contact: Mohamad Al-Arief Royal Netherlands Embassy, Jl. H.R. Rasuna Said Kav. S3 Kuningan, Jakarta (62-21-525-1515) Contact: Jaco Mebius

The Netherlands Provides Grants to Support Indonesia’s Ongoing Reform in the Water Sector

Jakarta, 30 August 2001 -- A grant agreement was signed at the Ministry of Finance in Jakarta today for the Indonesia Water resources and Irrigation Reform Program (IWIRIP) by the representative of the Government of Indonesia, Minister of Finance, H.E. Boediono, and the representative of the World Bank, Country Director for Indonesia, Mark Baird. Representative of the Netherlands, First Secretary of the Royal Netherlands Embassy, Jaco Mebius, witnessed the signing. Through IWIRIP the Government of the Netherlands is making available a grant in an amount of US$ 10,000,000, for government reform in the water resources and irrigation sector –in which US$9,700,000 is executed by the Government of Indonesia and the remaining US$300,000 by the World Bank. The main implementing agencies are the Ministry of Settlements and Regional Infrastructure and the Ministry of Home Affairs. Representatives of the Ministry of Settlements and Regional Infrastructure (KimPrasWil) and the Ministry of Home Affairs attended the ceremony. However, the key concern of the IWIRIP and the reform is to strengthen local governments at the Provincial and Kabupaten levels for their tasks in water resource management, as well as the autonomous irrigation organizations that farmers are setting up for the operation and maintenance of their irrigation systems. Much of the fund will therefore be managed and disbursed by the local Bappedas.

“Water and irrigation affect the daily life of millions of Indonesians. Empowerment and stakeholder participation are a key element in successful development of this vital sector,” said H.E. Baron Schelto Van Heemstra, Ambassador of the Netherlands, on a separate occasion.

The main objectives of the IWIRIP are to improve irrigation performance by the introduction of new national and provincial policies in the water sector. The focus of the project is directed towards community participation through the establishment of the autonomous, self-reliant and self-governing water associations of farmers, the Water User Associations (WUA) and towards the establishment of provincial river basin planning organisations, the Balais PSDA. The project aims to provide greater stakeholder participation in water resources planning and in setting priorities in irrigation investment.

“This water sector reform program which is being supported by our partners from the Netherlands will help preserve this country’s natural resource endowment for future generations by introducing new, efficient approach to resource management,” said Minister Boediono.

The IWIRIP will build upon the successful World Bank-financed Java Irrigation and Water Resources Management Project (JIWMP) which has piloted irrigation reform in four provinces in Java. The program will continue to support the reform activities in these provinces (Yogyakarta and West, Central and East Java) and extend them to Aceh, North, West and South Sumatra, Lampung, Central and South Sulawesi and East Nusa Tenggara. The program will have a duration of two years. On the side of the river basin management, the Balais for the management of the river basins will be supported through the Provinces, while a component aimed at river basin planning will be executed by the Ministry of Settlements and Regional Infrastructure. That Ministry will also provide guidance on technical questions, whilst Bappenas will coordinate the project.

“We are very pleased to be associated with this grant assistance from the Netherlands. We are strongly committed, in partnership with the Government of the Netherlands and the Government of Indonesia, in supporting Indonesia’s ongoing reform in the water sector,” said Mr. Baird.

The program will start its activities in September. The program is expected to develop a viable partnership between the government at local, regional and national level and water users at local and regional levels.

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Please visit the website of the Royal Netherlands Embassy in Jakarta: www.netherlandsembassy.or.id

For more information on the World Bank Program in Indonesia, visit : www.worldbank.or.id