AusAid and ADB Join Forces for Infrastructure Development in Timor-Leste

MANILA, PHILIPPINES – AusAid and the Asian Development Bank (ADB) will assist the Government of Timor-Leste to fast track much needed infrastructure projects to accelerate growth and provide jobs and services for the Timorese people.

The two organizations and the Government have committed up to US$18 million to help Government of Timor-Lester prepare, procure, and manage contracts, goods and works working through the Timor-Leste Government’s own systems.

The Australian Government, through its overseas aid agency AusAID will contribute US$12 million equivalent, and ADB will provide a US$3 million grant. Timor-Leste will contribute US$3 million to cover project management activities.

The infrastructure projects will be implemented over a four-year period starting this month. Australia’s contribution is part of an enhanced package of assistance, recently announced by Australian Minister for Foreign Affairs Alexander Downer on 30 August 2007, to strengthen East Timor’s economic management including delivery of its significant capital works program.

In 2006-07, the Government of Timor-Leste set aside US$119.7 million for capital development. Nearly half the 2007 capital budget is for roads, bridges, and other transport assets, and communications, water supply, sanitation and power infrastructure.

Capital budgets are significantly under-spent in Timor-Leste, and as a result, infrastructure and poverty reduction targets set under the Timor Government’s National Development Plan are at risk.

Support will initially focus on adding to the Government’s technical capacity to deliver good projects that create thousands of jobs and improve public services. Later, the focus will shift to long-term capacity-building.

Support for infrastructure is also an important focus for ADB and AusAID, who along with other development partners have been working with Timor-Leste to promote economic development in the country.

The Government of Timor-Leste has a reform program to improve capital budget execution, for instance, allowing line ministries more freedom to procure contracts and enforcing strict rules that encourage ministries to improve budget execution. External assistance from Australia and ADB will help the Government achieve its ambitious work programs.

Timor-Leste is one of the world’s newest nations. Timor-Leste was internationally recognized as an independent democratic state in 2002. The country, composed of 14,874 square kilometers of rugged terrain, lies northwest of Australia.