The Multi Donor Fund (MDF) of foreign nations and international financial institutions has paid out 334 million dollars of 692 million pledged since May 2005 to help tsunami-hit Aceh province and Nias island, a progress report said.

MDF funds, which make up less than 10 percent of the 7.2 billion dollars in aid pledged after the disaster, have been spent on building and repairing over 13,000 houses, more than 2,500 kilometres (1,500 miles) of roads and over 1,000 bridges, it said.

"The success of the programme is increasingly evident, and while there remain challenges, we will be working together to improve the situation in Aceh and Nias," MDF manager Shamima Khan said.

Despite lauding the success of reconstruction in the region, which saw more than 168,000 people killed in the disaster, donors said the operating period of the MDF would be extended by two years to 2012 to ensure hundreds of millions of dollars in remaining funds are paid out.

"Frankly I think we probably initially would have wanted to have spent more of the money by now but... the experience of these reconstruction efforts is there are always some things that take longer," said Chris Hoban, the Indonesia operations director of the World Bank, which is part of the MDF.

Donors would also drag out spending to blunt an anticipated weakening of the economy and rise in unemployment as aid money dries up and the Indonesian government's reconstruction agency ends its mandate in 2009, he said.

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