Indonesia Disburses Rp4.4 Trillion in Additional Funds to Disaster-Hit Regions

Jakarta: The Indonesian government has distributed additional regional transfer funds worth Rp4.39 trillion (approximately USD251 million) to provinces in Sumatra affected by recent natural disasters.

According to the Ministry of Finance, the funds were disbursed at the end of February 2026 to support 67 districts and cities in three provinces impacted by floods and landslides, including neighboring regions whose transfer allocations under the 2026 State Budget declined compared to the previous year.

“The additional transfers are intended to help regional governments accelerate post-disaster recovery, alongside central government funding allocated for emergency response, rehabilitation and reconstruction,” said Deni Surjantoro, head of the ministry’s Communication and Information Service Bureau, on Tuesday, as quoted from Antara, Wednesday, March 11, 2026.

The total additional regional transfer allocation approved by Finance Minister Purbaya Yudhi Sadewa amounts to Rp10.65 trillion (around USD609 million).

The additional funds will be distributed in stages to offset reductions in regional transfers under the 2026 State Budget compared to 2025. The financing mechanism includes additional allocations from the General Allocation Fund (DAU), the Revenue-Sharing Fund (DBH), and special autonomy funds, in accordance with a presidential instruction.

The Ministry of Finance plans to distribute the funds in three phases—February, March and April.

As an initial step to support disaster management and recovery, the finance minister has also introduced several policy relaxations related to the distribution and use of regional transfer funds in affected areas. These include allowing earmarked funds to be used flexibly for disaster response and recovery efforts.

The policy also provides relief for regional governments with outstanding loans under the National Economic Recovery (PEN) program.

The relief measures include postponement of principal and interest payments during the recovery period, extension of loan tenures for up to 15 years, and conditional write-offs for infrastructure loans where more than 70 percent of the asset value has been destroyed by floods, flash floods or landslides.

However, the relief is not granted automatically and must comply with the regulations governing PEN loans. So far, four regional governments in Sumatra affected by the disasters have utilized the loan relaxation scheme.