The Ministry of Finance Disbursed Rp43.8 Trillion in Unconditional TKD for Disaster-Affected Areas

Deputy Minister of Finance (Wamenkeu) Suahasil Nazara. (Photo: ANTARA)

JAKARTA - The Ministry of Finance (Kemenkeu) has prepared a strategic policy by allocating a Regional Transfer (TKD) fund of Rp. 43.8 trillion in 2026 which can be disbursed without conditions for disaster-affected areas.

Deputy Minister of Finance Suahasil Nazara said the policy was designed so that local governments (Pemda) could immediately carry out the reconstruction process without being hampered by administrative procedures.

Suahasil said that this relaxation was given to ensure the availability of development funds quickly in emergency conditions.

"We understand that friends in the Regional Government need to act quickly. Don't let it be hampered by administration. So, the total TKD without condition is Rp. 43.8 trillion in 2026," said Suahasil in the APBN KiTa press conference, Thursday, December 18.

He added that the state budget plays an important role in supporting the recovery of disaster-affected areas.

According to him, with this relaxation policy, the distribution of funds to the regions is expected to run more efficiently and currently, three provinces affected by disasters include Aceh, North Sumatra, and West Sumatra.

"For disaster-affected areas, the allocation of transfers to the 2025 area has been transferred and in 2026 we will transfer the channel unconditionally," he explained.

Suahasil said that in addition to financial assistance, the government also prepared a mechanism for handling loans from the National Economic Recovery Program (PEN) owned by these regions.

He explained that the Ministry of Finance offered two main schemes related to PEN loans which were previously used for infrastructure development.

First, for infrastructure that is still functioning, a restructuring of loans will be carried out through the extension of the payment period and the reduction of the installment amount.

"We will do an assessment, look at the infrastructure, if the infrastructure can still be reached, we are ready to provide loan restructuring. The tenor is extended and the installment is reduced," he said.

Second, for infrastructure that has suffered heavy damage or loss, the government provides relaxation in the form of loan cancellation so as not to burden the Regional Revenue and Expenditure Budget (APBD).

Suahasil emphasized that the restructuring and loan write-off policies were carried out selectively and responsibly.

He added that the Ministry of Finance would work with the Financial and Development Supervisory Agency (BPKP) to conduct an on-site assessment.

"So that the administration is good, we ask BPKP to see the condition of the infrastructure in the affected local government. We want to ensure that this policy is targeted and still maintains the credibility of the state's finances," he concluded.

For information, the PEN loan is a loan facility from the central government to the local government which was given during the COVID-19 pandemic, and most of it was used for infrastructure development and currently, the government is evaluating the use of the infrastructure.