The World Bank is ready to offer around $11 billion in funding to Indonesia, the lender said on Wednesday, in a sign that the Washington-based institution is pushing back on China’s ambitions to finance projects in Asia via the Asian Infrastructure Investment Bank (AIIB).
World Bank President Jim Yong Kim offered Indonesian President Joko Widodo up to $11 billion in new loans over the next three to four years to help fund basic infrastructure projects such as roads and seaports.
The offer by the World Bank comes at a time when China is ramping up its efforts to establish its AIIB, which is seen as a challenge to the Western-led financing institutions such as the World Bank and the Asian Development Bank (ADB).
Indonesia, a founding member of the Chinese-led AIIB, has welcomed loans from the soon-to-be established bank to assist in funding its mega infrastructure projects. China has pledged billions of dollars to help fund infrastructure projects across Asia via commercial investments in Pakistan and Indonesia, and the Export-Import Bank of China, which has funded power plants and roads in Vietnam and Myanmar.
Indonesian President Widodo is targeting over $400 billion in investment for infrastructure projects over the next five years, with the bulk of the funding expected to come from private investors.
“We reiterated our commitment to continue supporting Indonesia,” the World Bank President said, following a meeting with Widodo in Jakarta.
Kim praised Widodo for “going in the right direction,” and reiterated the World Bank’s projection of 5% economic growth this year.
In March, Widodo went on an Asian tour to rally investors, making stops in Beijing and Tokyo to seek funding for projects such as power plants, roads, seaports, and railways.
Following the tour, Widodo had around $63 billion in commitments from Chinese companies, with just under $9 billion from firms from Japan.