Manila, Philippines (BBN)- The Asian Development Bank (ADB) will provide a $50 million loan to support the Government of Indonesia’s efforts to cut rural poverty.

The 32-year loan will be used to repair and expand infrastructure services, including water and sanitation, health, education, and transport, an ADB press statement said on Tuesday.

It represents about 80 per cent of the estimated $62.5 million cost for the Rural Infrastructure Support to the PNPM Mandiri Project. The government and project beneficiaries will fund the balance of about $12.5 million.

The project will rehabilitate and expand rural infrastructure services in about 1,650 villages in the provinces of Jambi, Lampung, Riau, and South Sumatra, benefiting about 2 million people, or about 400,000 households.

It is expected to start in the first quarter of 2009, and finish at the end of 2010, the ADB said.

About two-thirds of Indonesia’s poor live in rural areas. Recent surges in global food and fuel prices, which have a disproportionate effect on rural communities, threaten to drive even more people into extreme poverty.

The project is in line with the government’s development strategy and is also designed to harmonize with assistance for rural infrastructure provided by other multilateral and bilateral organizations.

BBN/SI/SS/AD-01October08-1:12 AM (BST)