Jakarta – The World Bank has approved new long-term loans worth $1.1 billion to Indonesia, most of which will be targeted at improving the investment climate in Southeast Asia's biggest economy.

The World Bank said on its website the loans will help the investment climate by strengthening institutions in charge of providing investment services and improving tax administration.

The loans, with 24.5 year maturity and 9-year grace period, will also be used to strengthen poverty reduction programme in the world's fourth most populous country.

An annual World Bank report released this month ranked Indonesia as the top reformer of business regulations in East Asia and Pacific, but the report still ranked the country 122nd out of 183 countries in terms of the ease of doing business.

Indonesia last week passed a new law on special economic zones, which industry officials said could help attract up to $50 billion in new investment in the next two-three years.