The Board of Directors of the Asian Infrastructure Investment Bank (AIIB) has approved a USD248.4-million loan to the Indonesia Tourism Development Corporation, with a guarantee of the Republic of Indonesia (Indonesia), in support of the Mandalika Urban and Tourism Infrastructure Project. This will be AIIB’s first stand-alone operation in Indonesia and AIIB’s first tourism-related infrastructure investment.
The global tourism industry continues to grow and is a vital source of employment and income, contributing over 10 percent of the global gross domestic product and linked to 10 percent of jobs worldwide. Indonesia has a strong comparative tourism advantage in accelerating job creation given its rich tourism resources.
The project aims to provide sustainable essential infrastructure for the development of new tourism destinations in the Mandalika region of Lombok, including infrastructure improvements in surrounding communities. By facilitating private sector investment, the project is expected to create a significant amount of direct, indirect and induced employment in tourism as well as related businesses, boosting Indonesia’s tourism competitiveness and sustainable economic growth.
The project is aligned with the Government of Indonesia’s mid-term development plan and the Indonesia Tourism Development Priority Program. AIIB’s participation is expected to help optimize project design and implementation, thereby maximizing economic and social interlinkages and promoting sustainable development.
“AIIB is mandated to foster sustainable economic development in Asia by investing in infrastructure,” said AIIB Vice President and Chief Investment Officer D. J. Pandian. “This project reflects the synergy of AIIB’s efforts and initiatives of the Government of Indonesia in promoting sustainable tourism development in the country.”
“By investing in tourism-related infrastructure, we can promote balanced regional development in Indonesia and contribute to poverty reduction,” said AIIB Director General of Investment Operations Yee Ean Pang. “Women are likely to benefit from the project as tourism tends to employ a higher proportion of women.”