Dependence on fossil fuels exposes Indonesia to frequent changes in the price and supply of oil and coal, and increases greenhouse gas emissions that contribute to climate change. A project backed by Asian Development Bank (ADB) will help harness Indonesia’s largely untapped geothermal resources, allowing the country to meet its power demand while promoting a clean energy source.

In 2004, a tsunami engulfed Aceh Province in Indonesia and devastated 20,000 hectares of small fish ponds. Fish farmers faced technical, economic, and social difficulties in rebuilding their aquaculture livelihoods.

Problems often arise in complex projects, which could lead to complaints from the beneficiaries. In its emergency response in tsunami-hit Indonesia, Asian Development Bank has established a complaint-handling system that helped in enhancing the accountability of project implementers and increasing satisfaction of project beneficiaries.

The Earthquake and Tsunami Emergency Support Project of the Asian Development Bank (ADB) was designed to include a grievance mechanism. The ADB recognized early on that problems may arise in large-scale projects, especially so for this one, since the project area was devastated by a major earthquake and a huge tsunami, and has experienced years of conflict.

The Earthquake and Tsunami Emergency Support Project of the Asian Development Bank transformed twelve (12) weakened rural banks into one strong banking institution which provides microfinance services to micro and small enterprises in disaster-stricken Aceh, Indonesia.

The 2004 earthquake and tsunami in Aceh, Indonesia claimed the lives of thousands of fishers. Their deaths also took away much knowledge of coastal areas, fishing grounds, ocean currents, and navigational hazards. The fishers left in Aceh faced reduced incomes since they experienced various difficulties, such as regular net and boat damage due to unknown underwater obstructions. Many boat crews’ lives were also at risk, since they often could not identify their positions at sea.

Partnership with communities is an effective strategy to fast track and enhance responses to housing, agriculture, fisheries irrigation, education and water supply. This was an important lesson found in the experience of Aceh and Nias Island in Indonesia, when it grappled with the widespread destruction and loss of lives left by two powerful earthquakes in 2004 and 2005.

To help Indonesia recover from the 2004 and 2005 earthquakes, the Asian Development Bank, through the Earthquake and Tsunami Emergency Support Project, introduced the Microfinance Innovation Fund, a revolving fund that assists banks which implement microfinance services for micro and small enterprises.

This knowledge workout to support the establishment and operationalization of the Indonesia Center of Excellence for Clean Energy served as the first pilot test case of ADB’s “knowledge department” in applying the integrated knowledge partnership building strategy on operational needs that will produce next generation investments and finance using ADB’s “Finance ++” and “One ADB” approaches. ADB's knowledge department comprises of the Energy Sector Group, Knowledge Sharing and Services Center, South East Energy Division, and the Private Sector Operations Department.

More than 25 years of conflict and a major disaster have led banks in Aceh and Nias Island in Indonesia to be averse to risks, especially when it comes to micro and small enterprises. Many of these banks were not adequately informed of the benefits they stand to gain from microfinance development.