Jakarta, 21 April 2025: ERIA hosted a high-level roundtable discussion on ’Financing Water-Related Investments’ at its Jakarta office on 21 April. The event forms part of an ongoing ERIA research project led by Senior Economist Dr Fauziah Zen, in collaboration with the University of Indonesia and the Ministry of National Development Planning (Bappenas). The roundtable aimed to facilitate knowledge exchange and identify policy directions to enhance financing mechanisms for clean water provision in Indonesia and other developing economies, amid widespread infrastructure deficits and inadequate access to clean water.

Diverse and Expert Participation

The roundtable brought together a wide range of stakeholders across academia, government, utilities, development partners, and civil society. Academic contributors included world-renowned water experts Prof. Guy Alaerts (IHE Delft), Prof. Asit K. Biswas and Prof. Cecilia Tortajada (both from the University of Glasgow), along with Dr Riatu M. Qibthiyyah (University of Indonesia and Special Adviser to the Minister of Bappenas), Teuku Riefky (University of Indonesia), and Achmad Solikhin (ERIA).

Government participants represented Bappenas, the Ministry of Public Works and Housing, the Ministry of Home Affairs, and Jakarta’s Department of Water Resources. Key insights were also shared by representatives from water utilities such as PDAM Padang City, PT Tirta Asada Depok, PT Moya Indonesia Holdings, Perum Jasa Tirta I, Paljaya, and the Indonesia Water Association (PERPAMSI). Development partners and NGOs included the World Bank, UNICEF Indonesia, the Indonesia Water Institute, and Global Water Partnership Southeast Asia.

Key Takeaways

Session 1: Bankable Pipelines for Water Infrastructure

Moderated by Prof. Guy Alaerts, the first session addressed the critical challenge of creating bankable water projects. He emphasised that beyond financing gaps, a key barrier is the limited absorptive capacity of water utilities. Dr Mohammad Irfan Saleh of Bappenas highlighted Indonesia’s persistent underinvestment in the water sector, while utility representatives noted that politically sensitive tariffs often remain too low to recover costs. Participants stressed the need for efficiency improvements, greater government support, and increased private sector involvement to diversify financing and technical expertise. Contributions from Irma Setiono (World Bank) and Salathiel Nalli (UNICEF) shared practical strategies for revenue enhancement and cost reduction in water utilities.

Session 2: Financing Small-Scale and Rural Water Provision

This session explored financing solutions for underserved areas, with a focus on community-based approaches and private sector involvement. Moderator Prof. Cecilia Tortajada highlighted lessons from India and China, where roles amongst governments, NGOs, and private actors differ widely. Dr Firdaus Ali (Indonesia Water Institute) pointed to the heightened challenges rural areas face due to climate impacts and limited funding. The discussion also spotlighted Pamsimas, Indonesia’s community-based rural water program, and stressed the need for improved coordination with PDAMs and sustained national budget support. Participants also examined wastewater management and sanitation, noting regulatory gaps and insufficient infrastructure. Experiences from China and Pamsimas illustrated the effectiveness of performance-based incentives and well-targeted subsidies in driving better outcomes.

Looking Ahead

The insights from this roundtable will feed into ERIA’s ongoing research study, to be published in an upcoming book. The study team will continue the dialogue at a public seminar titled ’Financing Clean Water: Strategies for Sustainable Investment in Developing Economies’ on 22 April 2025. Co-organised by ERIA, Bappenas, and the University of Indonesia, the seminar aims to expand the conversation to a broader audience and deepen institutional collaboration on clean water provision in the region.