- An estimated US$7.8 billion has been committed by the Government of Indonesia and the international community towards reconstructing Aceh and Nias
- US$6.4 billion has been allocated to specific projects in the reconstruction portfolio, with an estimated US$4.7 billion – or 73 percent – disbursed by mid 2008.
- The Government of Indonesia is channelling almost all of its funds for the reconstruction effort through BRR. In 2005 BRR received US$407 million; US$638 million in 2006; US$855 million in 2007; a further US$327 million in 2008.
- The MDF was initially established in May 2005 at the request of the Indonesian Government to the World Bank to ensure the efficient and coordinated delivery of financial support from various donors.
- The MDF pools approximately US$685 million in grant resources provided by 15 donors. This amount is equivalent to approximately 10% of the overall reconstruction effort for Aceh and Nias.
- As of September 30, 2009, the MDF has allocated US$601 million to 21 projects
Five years after the tsunami, the reconstruction of the province of Aceh in Indonesia is nearing its end, with houses, infrastructure and social services to a large extent rebuilt and restored. It has been one of the largest reconstruction efforts in the developing world, with more than US$7 billion committed to rebuild the province, of which a large share has been already spent. Aceh's reconstruction has been a test case in many respects. It was led by a government agency, BRR, which was set up exclusively for that task. The international community committed an unprecedented amount of resources to the reconstruction of the province, adopting the objective of 'building back better', and came together in the form of the Multi Donor Fund for Aceh and Nias, a key coordination mechanism in the delivery of aid for Aceh . In Aceh, NGOs also played a key role, with almost a third of all resources and a very strong, and early, presence on the ground. The reconstruction of Aceh was carried out in a relatively complex political environment. The province had been affected by a 30-year separatist conflict that was still ravaging the province at the time of the Tsunami. Aceh's reconstruction was going to be an enormous task in any circumstance. The conflict compounded the challenge and, at the same time, the tragedy created an opportunity to escape the cycle of conflict. This situation called for a firm commitment from the national government, the local governments and population as well as the international community to work together in Aceh's reconstruction, raising above differences and intensifying efforts to make the most of the window of opportunity that the end of the conflict in mid 2005 presented. By end of 2008, Aceh is in peace, reconstruction is advanced and the economy has been growing steadily. It is important to recognize the progress made and give due credit to all parties involved, particularly the national and local authorities that have been working at a very intense pace since the tsunami. Still, the hard work is not yet over, as the province transitions from post-tsunami reconstruction to longer term development. Aceh continues to have one of the highest poverty levels in Indonesia of 23 percent, despite being rich in natural resources. The national and local governments have ambitious plans for Aceh, and as a result of the peace agreement have made additional resources available for Aceh . Going forward, the Acehnese will drive the development of the province even more so that they already do now. In its post-reconstruction transition, Aceh will become a more normal province of Indonesia sharing similar development challenges. | About Multi Donor Fund (MDF) |
The Multi Donor Fund for Aceh and Nias pools about US $ 685 million in grant resources provided by 15 donors, including the World Bank, to support implementation of the government’s rehabilitation and reconstruction program after the December 2004 tsunami and subsequent March 2005 earthquake. At the request of the Government of Indonesia (GOI), the World Bank serves as the trustee to administer the MDF which is in turn governed by a Steering Committee comprised of donors, GOI, and civil society representatives, with the United Nations and international nongovernmental organizations participating as observers. The 15 donors contributing to the MDF are: the European Commission, the Netherlands, the United Kingdom, the World Bank, Sweden, Denmark, Norway, Germany, Canada, the Asian Development Bank, the United States of America, Belgium, Finland, New Zealand and Ireland. The overall goal of the MDF is to contribute efficiently and effectively to the reconstruction of a “better” Aceh and Nias following the earthquakes and tsunami. Therefore the projects not only reconstruct infrastructure and rehabilitate the economy in accordance with GOI’s Master Plan, but also address social concerns such as reducing poverty, improving livelihoods, and increasing gender equity. After the official closure of BRR in April 2009, the MDF has been working closely with the National Planning Agency (Bappenas), The Government of Aceh and The Government of North Sumatra to identify and respond to remaining needs in the reconstruction process. This evolving role will continue until MDF closes in December 2012. Figure 1: MDF Project Status as of September 30, 2009 (Click to enlarge)
| | Portfolio Progress
| | The official closure of BRR in April 2009 signaled the end of the reconstruction phase for many actors, and many international donors and NGOs ended their post-disaster programming in Aceh and Nias during 2009. The MDF has significantly contributed to these reconstruction efforts and its role remains important in the post BRR period. As of September 30, 2009, the MDF has 21 projects at various stages of implementation; with a further two projects that are under preparation. As shown in Figure 1, the majority of the projects are under full implementation and several projects have closed or are scheduled to close in the coming months. Notable results have been achieved in rebuilding physical assets at the community level. Housing targets have been reached in Aceh and good progress is being made in Nias, with a total of 19,112 houses completed, rehabilitated, or under construction as of September 30, 2009. Community Recovery projects have assisted communities to reconstruct vital community infrastructure, including 2,655 kilometers of village roads, 936 bridges, 1,473 kilometers of irrigation and drainage channels, and 5,750 village water systems. Investments in large infrastructure projects have provided the people of Aceh with about 290 kilometers of new and rehabilitated roads, 9 municipal water systems, and have rehabilitated three vital ports. Results in the environment sector are positive, and work in the economic development sector, which represents a later phase of MDF funding, is now moving towards implementation. The overall reconstruction process is receiving continued support from the MDF through technical assistance, governance and capacity building programs. | Financial Progress
| | As of September 30, 2009, the MDF has allocated US$601 million to 21 projects in five outcomes areas: recovery of communities; infrastructure and transport; rebuilding governance; supporting sustainable management of the environment; and economic development. Approximately 66% of allocated funds have been disbursed to projects.
The majority of funds (37%) are allocated for recovery of communities. The infrastructure and transport sector received 30% of allocated funds, while projects implemented in the environment and governance and livelihood sectors received the remaining 33% of fund, as shown in Graph 1. Graph 1: MDF funds allocated 
Figure 2: MDF Pledges, Allocations and Disbursements 
For more information on the progress of the MDF, please click here | | Financial Progress Data
 Summary of allocated funds - Aceh and Nias: download(3.79kb) 
Summary of disbursed funds - Aceh and Nias: download(3.79kb)
Summary of needs, projects, and gaps - Aceh and Nias: download(4.22kb) Published Reports - MDF Report: Five Years After The Tsunami (Jan 2010)
- Reconstruction Finance Update (April 2008):
- Recovery Framework:
- 6 Month Rebuilding Report (plus video)
- 9 Months After Report
- 1 Year After Report
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