Based on this position, the Indonesian Government expressed a desire for assistance in developing welfare facilities for the elderly, rather than for projects benefiting individual former comfort women. This conclusion was reached primarily because: (i) it would be extremely difficult to authenticate former comfort women; (ii) it was important to protect the honor of the former comfort women and their families; and (iii) the question of war reparations from Japan to Indonesia had already been settled by accords, specifically the Treaty of Peace.

In December 1996, this decision was explained to visiting Fund executives by high-ranking officials in Indonesia's Department of Social Affairs and the office of the State Minister for the role of women. Some Fund members expressed a strongly held opinion that atonement money should be provided to individual former comfort women, but the Fund eventually agreed, consenting to decisions taken by both countries' governments. As a result, 50 facilities to be built within 10-year period in the regions where former "wartime comfort women" are believed to be stationed.

The Fund requested that former comfort women should be given priority when admitting people to the facilities, and that areas where the victimization of comfort women had occurred should be given priority when selecting locations for those facilities. The Fund received the Indonesian Government's commitment that former comfort women who had come forward would be given priority when selecting residents of the facilities to be constructed under the projects. Also, the facilities would mainly be organized in those areas where many comfort women were thought to have been living.

On 21 March 1997 Prime Minister Hashimoto sent a letter of apology regarding the Comfort Women issue to the Pressident of Indonesia Suharto.

On 25 March 1997, a Memorandum of Understanding was signed by the Indonesian Department of Social Affairs and the Asian Women's Fund(Full Text), and the projects began. The Department was designated as the organization implementing the projects, and it was agreed that the Asian Women's Fund would offer a total of 380 million yen as assistance over a 10-year period, taken from financial resources of the Japanese Government.

The project ran as follows: A total of 69 facilities were built. In the first period of the project, five facilities were built; the second, six; the third and forth, ten; the fifth and sixth, 21; and the seventh, 27. According to the final report of Indonesia's Ministry of Social Affairs, there are currently 235 welfare facilities for senior citizens nationwide. Two of them are managed by the central government and 71 by provincial governments. The remainder are run by private organizations. Twenty-nine percent of all facilities include the buildings constructed by the Fund. The facilities are distributed across the country. Almost all facilities were built to expand existing welfare facilities for senior citizens. In certain cases, however, the building built under the Fund's project is the only building at the facility. The facility established by the foundation in Blitar known as the "Family" in the final fiscal year of the Fund is a facility that houses 14 former comfort women.

The Fund has promoted observation tours of the facilities to the best of its ability. It was able to visit 41 of the 69 facilities. All of the new buildings have a positive environment and are well maintained. Senior residents who experienced life under Japanese occupation are now living comfortably in those buildings. Once a person becomes a resident he/she can live in the facility for the rest of his/her life. The facilities have burial grounds for residents who have passed away.

In January 2007, the Ministry of Social Affairs presented a final report of the project of the AWF in Indonesia. (Full text)