On 25 November 2019, the Regional Hub Indonesia (RH-I) led the negotiations with the Government of Indonesia on the said project. A representative from the Legal Division participated, and support was also provided by the Reverse Linkage Division during the early negotiations stage. The government was represented by the Ministry of Finance (IsDB Governor’s Office), Ministry of National Development Planning and the Ministry of Agriculture (Executing Agency). The negotiations concluded successfully with the signing of the Minutes of Negotiations, after both sides mutually agreed on the project details and the contents of the draft Financing Agreements.
The overall goal of the project would be to reduce poverty in upland areas through remunerative, sustainable and resilient livelihoods. The development objective of the project would be to assist rural households to increase their incomes, food security and overall well-being. The total project cost is US$ 151.654 million, with the IsDB Group providing financing through an LLF-blended Installment Sale operations for US$ 66 million, and ISFD Loan for US$ 4 million and a Reverse Linkage Grant for US$ 0.5 million. Along with being the 1st LLF intervention in the region, the project is also co-financed by IFAD for an amount of US$ 50 million.The project represents an excellent opportunity for IsDB, ISFD, LLF and IFAD to play a transformative role in developing an approach which would assist the Government in not only up-scaling its program for the development of upland areas, but also to extend the model to cover paddy field areas in swamplands as well.