AIIB to offer 1 bln USD loan to Indonesia's COVID-19 response

Illustrative image (Photo: Reuters)

Hanoi (VNA) – The Asian Infrastructure Investment Bank (AIIB) will allocate a total of 1 billion USD in loans to help Indonesia in its COVID-19 response.

The first disbursement of the loan will amount to 250 million USD, as part of the co-financing programme with the World Bank and the Islamic Development Bank to provide a total of 750 million USD in loans.

The AIIB is also planning to offer another 750 million USD in loans for Indonesia to fund its economic relief and social safety net programmes, as part of the co-financing programme with the Asian Development Bank (ADB), which is committed to providing 1.5 billion USD for the country.

Indonesia, which saw confirmed cases of COVID-19 surge to over 13,000 on May 8, requested the loans to finance its efforts to strengthen hospital readiness, pandemic response and testing capacity.

The AIIB forecast that the Indonesian economy to grow by less than 1 percent this year before recovering in 2021, compared with its initial projection of 6 percent annual growth for Southeast Asia’s largest economy.

Meanwhile, credit rating agency Fitch also downgraded Indonesia's GDP growth to 1.3 percent from 2.8 percent this year due to slow economic recovery and prolonging lockdown order./.