News Releases

Australia, Indonesia and the Global Fund sign debt swap agreement to increase Tuberculosis services in Indonesia

05 July 2010

Jakarta, 15 July 2010 - Australia, Indonesia and the Global Fund today concluded a landmark agreement that will increase support to tuberculosis programs across Indonesia.

The Debt2Health agreement was announced by Stephen Smith, Australian Minister for Foreign Affairs and Trade and Dr. R.M Marty M. Natalegawa, Indonesian Minister of Foreign Affairs at the Indonesian Ministry of Foreign Affairs.

Indonesia has the third highest rate of tuberculosis in the world, with more than 90,000 Indonesians dying from the disease every year. Despite tuberculosis being preventable and curable, the disease is on the rise in Indonesia and many other developing countries.

Under a Debt2Health arrangement, Australia will cancel AUD$75 million of Indonesia's debt. In return, Indonesia will invest half of this amount in national programs to combat tuberculosis through the Global Fund to Fight AIDS, Tuberculosis and Malaria.

The Australian Minister for Foreign Affairs and Trade said: "This fulfils a commitment Australia made in 2007, and is a further demonstration of Australia's commitment to working with Indonesia to address development challenges.

"Australia strongly supports this Debt2Health swap with Indonesia and the Global Fund to tackle the challenge of treating and preventing tuberculosis."

The Indonesian Foreign Minister welcomed the swap as a sign of the good and friendly relations between the two countries.

"The Debt2Health initiative, which we supported from the beginning makes it possible for us to redirect our debt service towards public health," said Rahmat Waluyanto, Director-General for Debt Management at the Indonesian Ministry of Finance.

Professor Michel Kazatchkine, Executive Director of the Global Fund, also welcomed the agreement. "In order to reach and sustain the level of funding we need in the fight against the most deadly epidemics of our time, we must make use of innovative finan­cing opportunities like Debt2Health. We are delighted that Australia has joined the initiative and are very grateful for the trust that it shows in our work" said Kazatchkine.


Indonesia is Australia's largest development assistance program. Through the Australian Government's development partnership with Indonesia, both countries are working together to reduce poverty and promote regional peace, stability and prosperity. Australia works with Indonesia to improve education, strengthen health care systems, improve infrastructure and governance, and protect the environment.

In the area of health, Australia is helping Indonesia to strengthen its health systems, improve the health of its women and children, halt the spread of HIV and address infectious diseases and pandemics, including tuberculosis.


Supplementary Information on the Occasion of the Signing of the Debt2Health agreement between Indonesia, Australia and the Global Fund in Jakarta, 15 July 2010

This debt swap signed today in Jakarta by Robert Filipp, Head of Innovative Financing of The Global Fund, Dr Rahmat Waluyanto, Director General of Debt Management at the Indonesian Ministry of Finance, and Jacqui De Lacy, Minister-Counselor and Senior Representative of AusAID is the third Debt2Health agreement. Under this agreement Australia will cancel a AUS$ 75 million debt owed by Indonesia. Indonesia will pay half of that to the Global Fund to be used to fight tuberculosis in the country through Global Fund approved programs.

Already in the past two Debt2Health agreements have been signed. Germany and Indonesia signed the first Debt2Health Agreement in September 2007, in which Germany forgoes Euro 50 million and Indonesia will invest the equivalent of Euro 25 million in health through approved Global Fund programs. In December 2008 the second agreement was signed between Germany and Pakistan in which Germany cancelled Euro 40 million and Pakistan invests Euro 20 million in Global Fund approved programs in the country.

Debt2Health is an innovative financing initiative of the Global Fund. It helps channel resources of developing countries away from debt repayment towards life saving investments in health.

To bring about a Debt2Health agreement the Global Fund identifies and negotiates debt conversion opportunities and then facilitates a three-party agreement among creditors, the beneficiary country, and the Global Fund. Under a Debt2Health agreement, creditors forgo a portion of their claims on the condition that the beneficiary country invests an agreed upon amount in health through a Global Fund-ap­proved programme.

In Debt2Health a creditor government cancels a certain amount of debt owed by a developing country with high debt and high disease burden. The beneficiary country makes the counterpart payment to the Global Fund. The Global Fund then disburses the counterpart funds through the same mechanisms and on the same principles as other funds to the beneficiary country.