JAKARTA, May 20 ― The World Bank Group today offered Indonesia up to US$12 billion (RM43.4 billion) in new financing to 2019 to support President Joko Widodo's ambitious infrastructure plans, its president said.

Jim Yong Kim, World Bank Group president, said around US$8 billion would be available for reconstruction and development in Southeast Asia's largest economy, up 25 per cent from the previous four years.

“We plan to deliver one of our largest financial commitments in the world to Indonesia from the Jakarta office,” Kim said in a statement released after meeting Widodo, adding that the global lender has formed more than six decades of partnership with Indonesia.

The World Bank is not the only one offering President Widodo support to make good on his promises of a massive infrastructure push during his 5-year term.

Chinese President Xi Jinping on a visit to Jakarta in April had already expressed his interest to increase China's infrastructure investments to Indonesia.

China is offering US$40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia, including to Indonesia.

Indonesia has also expressed interest in joining the China-backed US$50 billion Asian Infrastructure Investment Bank, which is seen as a rival to the US-dominated World Bank.

The Asian Development Bank (ADB) has also offered Indonesia US$1.5 billion in loans to help finance delayed infrastructure projects, its president Takehiko Nakao said during his visit to Jakarta in January.

“As long as our state budget is in deficit, we need to borrow. And for that, we will look for the best (lender) offering low interest rates and lenient requirements,” Indonesia's Finance Minister Bambang Brodjonegoro said.

Indonesia's government is targeting a budget deficit of 1.9 per cent of gross domestic product (GDP) this year, although it sees risks that the deficit could swell to 2.2 per cent on weak tax revenue. It wants the 2016 budget deficit to be around 1.8-2.1 per cent of GDP.

But for Indonesia, the problem with fixing infrastructure may not be about the money. Widodo has budgeted 290 trillion rupiah for infrastructure projects this year, more than a 50 per cent increase from the previous year, thanks to a fiscal windfall from eliminating fuel subsidies.

Yet, projects have still stalled due to bureaucracy and a revision to the state budget. Up to April, the government had only spent less than 2 per cent of its infrastructure fund. ― Reuters