JAKARTA (Kyodo) -- Japan has agreed to provide a nearly 28 billion yen ($250 million) loan to Indonesia to rebuild infrastructure in Central Sulawesi Province, which was devastated by a major earthquake and tsunami in 2018.
The agreement was signed by Japanese Ambassador to Indonesia Masafumi Ishii and Desra Percaya, director general for Asia-Pacific and African Affairs at the Indonesian Foreign Ministry.
According to an embassy press statement, the loan will be used for infrastructure that needs urgent reconstruction, including roads, bridges, dams and irrigation systems. Funds will also be used to improve river-related facilities, liquefaction countermeasures and public facilities.
The statement said the reconstruction will be based on the "build back better," or BBB concept, which aims to rebuild areas to be more resilient against disasters, to better prepare for future ones and is "expected to contribute to the rehabilitation and development of livelihood in Central Sulawesi."
Under the agreement, the loan, with an "untied procurement condition," can be paid back within 40 years with a 10-year grace period at 0.01 percent interest.
Late last year, Japan also pledged 5.09 billion yen in grants to Indonesia to support reconstruction and rehabilitation efforts in the province.
The grants will be used to finance three projects, including the rebuilding of a large bridge in the Central Sulawesi capital of Palu, which collapsed during the quake, and to strengthen disaster management information systems so that people can receive information related to disasters immediately.
Indonesia is prone to natural disasters, particularly earthquakes, because of its location in the so-called Pacific Ring of Fire.
A magnitude 7.5 earthquake and ensuing tsunami hit Central Sulawesi on Sept. 28, 2018, leaving more than 4,800 people dead or unaccounted for.
Most of the fatalities were caused by three tsunami waves as high as 11.3 meters that struck Palu, with seawater surging as far as 468 meters inland.
Many deaths from liquefaction were reported in Palu's districts of Petobo and Balaroa and the village of Jono Oge in Sigi Regency, with the ground opening up and swallowing some 4,000 houses.
The province also suffered losses estimated at 24.16 trillion rupiah ($1.7 billion), with almost 173,000 people displaced.