MCC, Government of Indonesia Launch $649 Million Infrastructure and Finance Compact

WASHINGTON (September 6, 2024) - Wednesday, the Millennium Challenge Corporation (MCC) and the Government of Indonesia launched the $649 million Indonesia Infrastructure and Finance Compact-a five-year grant focused on improving the quantity and quality of infrastructure and increasing access to finance for small and medium enterprises, especially those owned by women.

"MCC is thrilled to continue our long-standing partnership with the Government of Indonesia through this grant that will enhance access to finance for critical infrastructure and small businesses," MCC's Vice President of Compact Operations Cameron Alford said. "With an additional $49 million co-investment from the Government of Indonesia, MCC is excited to continue our nearly 20-year partnership- this time decreasing barriers to finance."

The compact was launched during a ceremony in Jakarta alongside U.S. Ambassador to Indonesia, Kamala Lakhdhir, and key Government of Indonesia counterparts including Vice Minister of Finance Thomas Djiwandono and National Development Planning Ministry Executive Secretary Teni Widuriyanti. The ceremony was part of a three-day visit by VP Alford to meet with government and private-sector stakeholders involved in the compact and celebrate this milestone.

Now that the MCC-Indonesia Infrastructure and Finance Compact is officially launched, the program begins its five-year implementation to advance infrastructure and access to finance in Indonesia, led by the Millennium Challenge Account - Indonesia II (MCA-Indonesia II), the implementing entity for the Government of Indonesia. On the infrastructure side, the compact will support infrastructure investments in five provinces that were identified and selected by the Government of Indonesia, specifically South Sumatra, North Sulawesi, Riau, Riau Islands, and Bali. The projects in these provinces will develop and utilize improved infrastructure planning that subnational governments can use to make transportation safer and more accessible to passengers.

The compact will also increase lending to small and medium enterprises, particularly to those owned by women. This will create economic opportunities for Indonesians by providing technical assistance to women entrepreneurs such as business enhancement and digital and financial literacy trainings.

The new Indonesia Infrastructure and Finance compact builds on MCC's partnership with Indonesia that began in 2006 with a $55 million Threshold Program. The threshold program implemented a national immunization strategy, built the capacity of health care workers, and supported government transparency initiatives. This was followed by the previous $474 million MCC-Indonesia Compact that concluded in 2018, focusing on public procurement, clean energy, and community health and nutrition.

The Millennium Challenge Corporation is an independent U.S. government development agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants that pair investments in infrastructure with policy and institutional reforms to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights.

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