MANILA, Nov. 17 (Xinhua) -- The Asian Development Bank (ADB) said Thursday it has approved a 500-million-U.S.-dollar policy-based loan to support reforms to state-owned enterprises (SOEs) in Indonesia.
The Manila-based bank said the loan will cover the first subprogram under the State-Owned Enterprises' Reform Program, which will help Indonesia improve the efficiency and resilience of SOEs and strengthen their corporate governance.
The ADB said the program is aligned with the government's comprehensive and ambitious State-Owned Enterprises Roadmap (2020-2024), which introduces wide-ranging reforms to transform SOEs and ensure they contribute to Indonesia's goal of becoming a high-income country by 2045.
The ADB added that the program is supporting a reduction in the number of SOEs while requiring them to focus on their core operations to be financially viable and efficiently provide essential public services.
It also supports measures to improve the quality of SOE boards, strengthen financial monitoring and disclosure, and help SOEs transition to a climate-compatible business model.
The ADB said the German development bank KfW will provide co-financing with a loan equivalent of 300 million euros (295.8 million U.S. dollars).
According to the ADB, Indonesia had more than 100 SOEs in 2021, with combined assets of 610 billion dollars, equivalent to about 53 percent of its gross domestic product. They provide a range of public services, including electricity, pharmaceuticals, air navigation services, food distribution and logistics.
The ADB said the sustained implementation of SOEs reforms will ensure SOEs support Indonesia's medium- to long-term development goals. ■