"The government won't seek new loans but prefer to re-allocate existing loans," said the World Bank's governance expert, Joel Hellman.

He said the World Bank might divert existing projects in Indonesia to the region devastated by the 6.3 quake, which killed more than 5,800 people and left more than 420,000 people homeless.

"The key overall costs will be linked to housing," Hellman told reporters. The mostly western creditors would also discuss Indonesia's progress in the reconstruction of tsunami-hit Aceh and Nias, an island off Sumatra island struck by a 8.7 magnitude quake three months after the December 2004.

In a report released ahead of the meeting, the Bank said that although there were enough funds to rebuild the two regions, there were still significant problems.

"Aceh and Nias are on the path to recovery, though many challenges still remain," said the report.

Eighteen months after the Asian tsunami, up to 20,000 families still live in tents, 30,000 still live in barracks, infrastructure repair was still lagging and unemployment was high, said the report.

World Bank lead economist to Indonesia, Bill Wallace, said the bank expects to pledge 900 million in new loans at the meeting.

Indonesia's Finance Minister Sri Mulyani Indrawati said last week, the government planned to ask for up to 1.9 billion dollars, to plug Jakarta's budget deficit, reported state newswire Antara.

At last year's CGI meeting, the World Bank pledged 855 million dollars for Jakarta, of which 125 million dollars was allocated for the reconstruction effort in the tsunami-hit regions of Aceh and North Sumatra.

The Asian Development Bank (ADB) said last week it has committed new loans of 1.0-1.1 billion dollars for Indonesia, higher than it has pledged over the last three years, due to the country's better fiscal management and macroeconomic improvements.

The CGI comprises 21 donor countries and 11 multilateral donors. The major donors are the World Bank, the Asian Development Bank and Japan.

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