FAQ

Below please find answers to commonly asked questions. Click on the question to see the answer.

What is the MDF?

The Multi-Donor Fund for Aceh and Nias brings together a pool of over US$ 686 Million in grant resources (as of December 2009), provided by donor countries and international organizations to support the implementation of the Government's rehabilitation and reconstruction blueprint. Donors who have announced pledges include the European Commission, The Netherlands, United Kingdom the World Bank, Norway, Sweden, The Asian Development Bank, Canada, Germany, New Zealand, Denmark, Finland, US, Ireland and Belgium. The Trust Fund is managed by the World Bank and guided by a Steering Committee consisting of donors, Government of Indonesia and civil society representatives with participation by the United Nations and the international NGO community.

What does the Multi Donor Trust Fund for Aceh and Nias do?

The overall goal of the MDF is to efficiently and effectively contribute to the reconstruction of a better Aceh and Nias following the earthquakes and tsunami. This is accomplished by:
  • Pooling donor resources to support a mutually-agreed portfolio of projects and programs
  • Working through and within the Government's Master Plan for recovery
  • Promoting bottom-up and demand-driven development
  • Partnering with Government and non-government agencies
  • Serving as a forum for donor coordination
  • Supporting a dialogue among the international community, civil society and the Government on progress in the recovery process
  • Chanelling the majority of the funds through the Government budget
The expected results from achieving this goal would be:
  • Regenerated communities and community infrastructure
  • Restarted livelihoods
  • Repaired larger infrastructure
  • Rebuilt governance
  • Sustain environment

How does a project request for funding?

  • Project initiator prepares draft project and submits to Badan Rehabilitasi dan Rekonstruksi (BRR)
  • The BRR endorses and sends the draft project to the MDF Secretariat for evaluation and recommendation
  • MDF Technical Review Group reviews the draft project and decides whether to recommend the project to the Steering Committee for review and endorsement
  • MDF Steering Committee reviews and endorses the draft project, partner agency and executing agency
  • Partner Agency organizes detailed description and plan of the project (appraisal) and sends to Secretariat
  • Project appraisal submitted to Steering Committee for approval
  • Signing of Grant between Partner Agency and Government of Indonesia
  • Implementation and project monitoring commence

How to submit a project proposal?

All project concepts for possible MDF financing must first be vetted by BAPPENAS

We would therefore like to suggest that you complete the attached BRR project (could be downloaded here) template and submit it to them if you would like to pursue MDFTANS financing for your proposals. Please contact : Egan Dirgantara for queries that were previously directed to Cheryl Koesdjojo. He may be reached by email at projects@brr.go.id and by phone at 0651 43434.

How to submit a project proposal?


A donor member is a country, an organization or private sector contributor who has made a pledge publicly with confirmation in writing, either by the Trustee or by signing the contribution agreement.

A contribution of US$ 10 million or more, will give you a vote on the Steering Committee.

Those contributing less than this threshold may decide to pool their resources so as to reach or exceed this threshold thereby being able to nominate a representative as a voting member for their pooled contributions, possibly on a rotational basis.


What financial safeguards and anti-corruption measures have been put in place at MDF portfolio and project level?

There are 4 levels of fund monitoring for all MDF projects.
  1. the Trust Fund is audited on a regular basis (disbursement)
  2. each partner agency (the UN, World Bank, Asian Development Bank or other qualified international organizations) has its own monitoring and auditing rules which will be applied to their respective projects
  3. the government also has its auditing body which will be supervising the processes
  4. the projects also have rules and regulations outlining their individual strategies to increase transparency and accountability. E.g. KDP (hand in hand with housing project) project will be using community announcement boards specifying, the amount of money that is being disbursed, the status of the projects, salaries for facilitators, etc. As this project strongly believes that social control in small community units works well to the above effect.

What financial safeguards and anti-corruption measures have been put in place at MDF portfolio and project level?

The Steering Committee will meet as frequently s necessary (meetings are expected to be held frequently during initial operations, but may subsequently become less frequent) to discharge its responsibilities.

The location of each meeting will be either in Jakarta, Aceh or Medan.

What criteria does the MDF Steering Committee use to approve projects?

The MDF has adopted a set of policy rules that it uses to determine which projects can receive funding.
Project Implementation Policy need to deliver on the following:
  • Enhance the quality of the recovery process
  • Use different capacities over time (short, medium and long term capacity building)
  • Support good governance
  • Use participatory processes for design and implementation. to enhance the capacity of district governments
  • Pursue sustainable development policies
  • Be gender sensitive
  • Support sustainable environmental development
  • Be geographically balanced over the tsunami and earthquake affected areas
  • Balance the workload amongst the partner agencies
  • Have a conflict sensitive approach Avoid regional disparity
Sectoral policy
Projects need to respond to needs that are not sufficiently addressed by other sources of finance.
These sectors include:
  • Transport
  • Housing
  • Flood control and irrigation works
  • Environment
  • Energy
Projects also need to have a measurable impact within the selected sector.

What is the position of the MDF versus the Bapel/BRR?

The MDF works together closely with the BRR. The BRR co-chairs the Steering Committee Meeting. All projects applying for possible MDF funding need to be approved by the BRR- project evaluation team first, and need to be in line with the master-plan of the Government of Indonesia for Aceh and Nias.

What is the difference between a MDF donor member and an observer member on the Steering Committee?

A donor member is a country, an organization or private sector contributor who has made a pledge publicly with confirmation in writing, either by the Trustee or by signing the contribution agreement. They have voting rights, together with other members like the co-chairs, the goverement representatives and the Civil Society representatives.

The observer members are the representatives of the International NGO'sand the United Nations. The observers participate in meetings for coordination purposes and do not have voting rights..

Does the MDF have defined priority sectors or geographic locations in which projects are financed?

Yes, the MDF has clearly defined priority sectors that it seeks to fund. They are sectors and projects supporting those sector that are not sufficiently addressed by other sources of finance.

The policy of the Steering Committee at a minimum, addresses the substantial funding gaps that enable a full rehabilitation of Aceh and Nias to its pre-disaster consitions. Once this has been achieved, remaining funds can be used to invest in improvements. This implies an initial focus on the substantial core funding gap, which are the following sectors, listed in descending orderof funding gaps present at the time of the establishment of the MDF:
  • Transport
  • Housing
  • Flood control and irrigation works
  • Environment
  • Energy
While there are also funding gaps in Banking and Finance, Fisheries, and Communications, these are less significant.

The sectoral investment policy of the SC is therefore to initially focus on the sectors where there are substantial funding gaps to meet core needs. This suggests that funding in the short-term should go to meeting financing gaps and/or resolving critical issues in:

community infrastructure (particularly housing), repairing larger infrastructure (especially transport, energy, flood control and irrigation works), restarting livelihoods (fisheries and banking/finance could be included here although their funding gap is less significant) and the environment.

In the medium term, the SC could also focus investment on the "building better" aspects of the Master Plan, including rebuilding governance.

Does the MDF only finance projects from its Steering Committee member countries?

No, any project that has been approved by the Bappenas and is within the mandate of the MDF could be approved by the Steering Committee for funding.

What is the role of the MDF in periodically evaluating the progress and results of projects which it finances?

A monitoring and evaluation framework has been established for the MDF to help ensure that the desired results and outcomes of the GOI recovery program are achieved. The framework covers 2 areas:
  • Grant approval and supervision process
    The MDF prepares a summary report every three months comparing actual performance with defined standards where appropriate. The report is forwarded to the GOI, its Grant Executing Agencies, designated Partner Agencies and the Steering Committee. The report will cover 1) time taken to complete different steps in grant review and approval process, financial performance (contributions versus pledges, disbursements) complaints received and their handling and the status of project supervision activities.
  • Reporting on results
    Each financed activity will define indicators for monitoring achievement
    Precisely defined indicators and targets
    Ensure M&E functions are established within Implementing Agencies and Partner Agencies. They will report every 6 months.

Can my firm contract directly with the MDF for business?

No, the MDF finances activities through Partner Agencies. Projects are implemented through Implementing Agencies. Funds generally flow thrugh the government of Indonesia's National Budget. All processes are in accordance with acceptable Worldbank procedures.


Go to the Java Reconstruction Fund Site

For more information please contact Olga Lambey: olambey@worldbank.org