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Report and Recommendation of the President to the Board of Directors on Proposed Grants to the Republic of Indonesia for the Earthquake and Tsunami Emergency Support Project and Contribution to the Multidonor Trust Fund











RRP: INO 39127




Report and Recommendation of the
President to the Board of Directors
on Proposed Grants to the Republic
of Indonesia for the Earthquake and
Tsunami Emergency Support Project
and Contribution to the Multidonor
Trust Fund







March 2005





Asian Development Bank






Report and Recommendation of the President


ADB CURRENCY EQUIVALENTS
(of 15 March 2005)

Currency Unit

rupiah (Rp)
Rp1.00
=
$0.00011
$1.00
=
Rp9,370

ABBREVIATIONS


ADB

Asian Development Bank

BAPPENAS

Badan Perencanaan Pembangunan Nasional (National
Development Planning Agency)

BKP

Implementation Coordination Board for Aceh-North Sumatra
Rehabilitation and Reconstruction

BPD

Bank Pembangunan Daerah (regional development banks)

BPK

Supreme Audit Institution

BPR

Bank Pembangunan Rakyat (rural development bank)

BRI

Bank Rakyat Indonesia

CAP

community action plan

CSO

civil society organization

DLA

damage and loss assessment

DMRR

disaster management rehabilitation and reconstruction

EMS

Extended Mission to Sumatra

ETESP

Earthquake and Tsunami Emergency Support Project

GDP

gross domestic product

ha

Hectare

IA

implementing agency

ICB

international competitive bidding

IEE

initial environmental examination

IPDP

indigenous peoples development plan

IPPF

indigenous peoples policy framework

IPA

indigenous peoples specific action

IPSA

initial poverty and social assessment

JFPR

Japan Fund for Poverty Reduction

km

Kilometer

KPK

Komisi Pemberantasan Korupsi (Anticorruption Commission)

LAR

land acquisition and resettlement

LARAP

land acquisition and resettlement action plan

LARPFPG

land acquisition and resettlement policy framework and
procedural guidelines

LARU

land acquisition and resettlement unit

MDG

Millennium Development Goal

MDTF

Multidonor Trust Fund

MFI

microfinance institutions

NGO

nongovernment organization

PMO

project management office

PMU

project management unit

PPMS

project performance monitoring system

TA

technical assistance

UN

United Nations



NOTES

(i)
The fiscal year (FY) of the Government and its agencies ends on 31 December. FY
before a calendar year denotes the year in which the fiscal year ends, e.g., FY2003 ends
on 31 December 2003.
(ii)
In this report, "$" refers to US dollars.


ADBs emergency support for Indonesia was mobilized through the Aceh-North Sumatra
Reconstruction Team of Southeast Asia Department (SERD), coordinated by R. Subramaniam
(team leader), under the overall guidance and direction of the director general, SERD. Sector
contributions were provided by: M.J. Rahman and M.E. Khan (agriculture); W. Zhou and B.
Alimov (fisheries); R.T. Moyes (microfinance); K. Saleh, Y. Shiroishi, and A. Abdulkadir (health);
W. Duncan, M. Senapaty, S. Synnerstrom, and D. Prijomustiko (education); A. Weitz and R.
Frauendorfer (water supply and sanitation); T. Miyazato (irrigation); F. Steinberg (housing); A.
Hebel (spatial planning and environment); J.M. Lacombe and O. Norojono (roads); S. Gupta
(energy); F. Ahmed and H. Purnomo (fiduciary oversight and implementation); L. Blanchetti-
Ravelli (resettlement); L. Kulp and S. Wendt (social and poverty impact); A. Konishi with support
from S. Hasanah and R. Omar (Extended Mission to Sumatra arrangements); A. Sundari (civil
society linkages); A.B. Frielink (donor interface); and K. Julian (headquarters coordination). M.J.
Rahman (agriculture and natural resources) and M. Lindfield (social sector) acted as sector
focal points, and S. Curry, advisor, SERD provided advisory support on procedural issues and
prepared the design and monitoring framework. K. Emzita provided legal counsel, and A. Guha
supported on procurement issues.

A team of staff consultants provided supported: V. Bohun (senior advisor); I. Boyle (energy); R.
Matondang (disaster management); W. Menninger (irrigation); and I. Setyawati (social impact).
CONTENTS

Page

GRANT AND PROJECT SUMMARY
i
MAP
vii
I.
THE PROPOSAL
1
II.
RATIONALE: ANALYSIS, PROBLEMS, AND OPPORTUNITIES
1

A.
The 26 December 2004 Tsunami
B.
Analysis of Key Problems and Opportunities
1
1
III.
THE PROPOSED PROJECT
9

A.
Objective
B.
Components
C. Special Features
D. Outputs
E.
Cost Estimates and Financing Plan
F.
Implementation Arrangements
9
9
10
11
19
20
IV.
CONTRIBUTION TO THE MULTIDONOR TRUST FUND
27
V.
PROJECT BENEFITS, IMPACTS, AND RISKS
27

A.
Economic Benefits
B.
Poverty and Other Impacts
C. Risks
27
27
28
VI.
ASSURANCES
30
VII.
RECOMMENDATIONS
32



APPENDIXES

1.
Design and Monitoring Framework
33
2.
Project Components
37
3.
Detailed Cost Estimates
64
4.
Organizational Structure and Implementation Arrangements
67
5.
Summary Initial Environmental Examination
68
6.
Summary Land Acquisition and Resettlement
76
7.
Indigenous Peoples Development Framework
82
8.
Summary Poverty Reduction and Social Strategy and Gender Action Plan
85
SUPPLEMENTARY APPENDIXES (available on request)

A.
Key Guiding Principles for the Project
B.
Land Acquisition and Resettlement Policy Framework and Procedural Guidelines
C.
Environmental Assessment and Review Procedures
D.
Terms of Reference for Consulting Services for Fiduciary Oversight Component
E.
Social and Poverty Impact Assessment of the Tsunami

EARTHQUAKE AND TSUNAMI EMERGENCY SUPPORT PROJECT SUMMARY

Beneficiary
Republic of Indonesiathe people affected by the 26 December 2004
earthquake and tsunami disaster.

Classification



Targeting Classification: Targeted Intervention

Sector: Multisector

Subsectors: Five sector groupings: (i) livelihood restoration
(agriculture, fisheries, and microenterprises), (ii) social services (health
and education, including skills development), (iii) community
infrastructure (rural water supply and sanitation, housing, and
irrigation), (iv) physical infrastructure (roads and bridges, power, and
spatial planning and environmental management), and (v) fiduciary
governance

Themes: Sustainable economic growth, Governance

Subthemes: Physical infrastructure development, development of
urban and rural areas, public governance, and civil society participation

Environment
Assessment
Category B: An initial environmental examination was undertaken.
Project Description
The Earthquake and Tsunami Emergency Support Project (ETESP) will
provide rehabilitation and reconstruction assistance to mitigate damage
caused by the devastating December 2004 earthquake and tsunami. It
will help restore essential public services, rebuild infrastructure, and
revive economic activity through livelihood support. The ETESP is
based on the findings of the joint damage and loss assessment, and
the emerging disaster management, rehabilitation, and reconstruction
(DMRR) strategy for Aceh and North Sumatra, jointly prepared by the
Government of Indonesia and the donor community, with active
participation of the Asian Development Bank (ADB). Consultations with
communities and nongovernment organizations have been undertaken,
and will be intensified in the process of formulating and implementing
subprojects under the ETESP. In view of the scale, complexity, and
nature of the disaster, the ETESP adopts a two-phase approach,
focusing first on providing development support to less-affected
regions, along with launching assessments in the most-affected
regions. Phase two involves subproject implementation after the spatial
planning and safeguard issues are resolved. The ETESP will
complement emergency assistance work launched by ADB through the
reprogramming of 11 ongoing projects and adding an Aceh-North
Sumatra component to the proposed Community Water Services and
Health Project.


Rationale
Among the affected countries, the impact of the December 2004
earthquake and tsunami was the most vicious in Indonesia, as evident
from the loss of 126,000 lives, 94,470 people missing, and 412,438
in