This document provides a summary of a presentation given on water resources management financing in Indonesia. It discusses several key topics: - The scope and institutions involved in water resources financing in Indonesia. - Issues impacting water security, food security, and sustainability of water resources ecosystems in Indonesia like pollution, watershed degradation, and climate change impacts. - Government policies and financing programs to address problems and achieve targets for water supply coverage, irrigation development, and food security. Challenges in policy implementation are also analyzed. - Recommendations are provided to enhance sustainability of water resources ecosystems and management in Indonesia.

1. Workshop on IWRM National Water Financing
Country Report on
Water Resources Management Financing
Yangon, Myanmar
3 October 2013
Sutardi
Indonesia Water Partnership

2. Outline of Presentation
1.
2.
3.
4.
5.
6.
7.
8.
9.
Scope of Water Resources Management Financing
Water Resources Financing Policy
Program & Funding for WRDM
Analysis of Problems
Sustainability of Water Resources Ecosystem
Water Security
Food Security
Water Resources Financing Implementation Plan
Recommendation

3. 1. Scope of Water Resources Management Financing
Objective:
 To collect data & information on scope and actors of
IWRM Water Resources Financing
 To analyse financing policies and its implementation
 Assessment to financing policies and its
implementation
 Recommendation

4. 1. Scope and Institution in Water Resources Financing
No.
Scope of Water Resources Management
Sectors/ Related Institutions
1
Urban flood damage reduction
2
Rural flood damage reduction
DG. Water Resources; BNBP
3
Drainage
DG. Water Res. and DG. Human Setl
4
Agricultural water supply
DG. Water Res. & Min. Forestry
5
Erosion and runoff control
Min. Forestry & DG. Water Res.
6
M&I water supply
DG.Water Res. ; DG. Human S;
PDAM, Private Sector
DG. Water Resources; BNBP

5. 1. Scope and Institution in Water Resources Financing (lanjutan)
No.
Scope of Water Resources Management
Sectors/ Related Institutions
7
Water quality management
Min. of Environment & DG. Water
8
Water Recreation
Min. Tourism; DG. Water Res.; Private
Sector
9
Fishing and hunting
Min. Fishery; Private Sector
10
Ecological systems
Min. Environmental, Min. Forestry,
DG. Water Res.
11
Navigation
Min. Communication; DG. Water Res
12
Hydroelectric power and Mining
Min. Energy & Mineral, DG. Water
Res. , PLN, Private Sector

6. 2. Water Resources Financing Policy
A. Financing for Water Resources Management & Development
Formulation of laws & regulations on water resources;
Development & management and allocation of water resources;
Provision of raw water supply for DMI, agriculture, environment, etc
Funding by government & managed by DG. Water Resources, Min. P.Ws
B. Financing for provision drinking water & sanitation
Regulating, controlling and fostering drinking water providers
Provision & operating of drinking water and sanitation facilities
Funding by central and local governments and private sectors.
DG. Human Settlements, Min. of PWs carried out government tasks

7. 3. Program & Funding for WRDM
 Programs on Water Resources Development & Management :
Development, management & conservation of rivers, lakes,etc;
Development & management of irrigation & swamp systems;
Provision and management of raw water supply;
Provision of flood management and coastal protection measures ;
Institutional and management improvements.
 Funding and source of funding;
Total estimated costs for 5 programs (2004-2009) US$4,042 million
Most of funding from central government, funding from local gov’nts. only
very small
About 30-40% from loan of ADB, JBIC, IDB, World Bank, etc

8. 4. Analysis of Problems
•
•
•
•
For the purpose of analyses financing water resources
management are grouped in 3 main themes:
a) Sustainability of function & benefits of water
resources ecosystem
b) Water Security
c) Food Security
To identify problems in three 3 groups above
To analyze financing policy and government program in
respond to problems in 3 themes above
Assesment on enhancement of government policies
implementation

9. 5. Sustainabilty of Water Resources Ecosystem
1) Problems that threathen sustainability of function &
benefit of water resources ecosystem
• water pollution and adverse impacts of untreated
municipal wastewater discharge, including industrial and
mining effluent disposal;
• adverse impacts of watershed degradation such as
increasing flood peaks causing economic damages,
decreasing dry season flow and sedimentation damages
to water infrastructure;
• Landslides due excessive heavy rainfall

10. Watershed and River Condition
1010
1100
1120
1130
1. Increase of critical lands (13,1 mil. Ha in
1992, now (2010) already > 18,5 mil
Ha).
2. Increase distribution of critical RCA (22
RCAs in 1984, 39 RCAs in 1992, become
62 RCAs in 2005).
1984 ---22 Critical RCA
1180
5090
4010 5150
5160
5170
1260
2010
2020
2040 2100
2050
2080
2120 2140
2090 2130
1010
1090
1100
1120
1130
1180
0
4140
1992 --- 39 Critical RCA
4030
4020
1210
1240
1290
5090
4010 51505100
5160
1260
2010
2020
2040 2100
2050
2080
5170
2120
2140
2090 2130 3010
2070
2110
2005 --- 62 Critical RCA
Watersheeds conservation
program covering 70 DAS of 23
million Ha, since 2012 to 2022
7020

11. STATUS OF WATER QUALITY IN SOME RIVER DI INDONESIA
No.
Province
Name of River
Status of Quality
UpStrm
Dwns
12.
DKI Jakarta
Ciliwung
HP
HP
13.
Jawa Barat
Citarum
HP
HP
14.
Jawa Tengah - DIY
Progo
LP
PL
15.
Jawa Timur
Brantas
LP
PL
16.
Bali
Tukad Badung
LP
LP
17.
Nusa Tenggara Barat
Kali Jangkok
LP
PL
18.
Nusa Tenggara Timur
Kali Dendeng
Good
LP
19.
Kalbar
Kapuas
LP
LP
20.
Kalteng
Kahayan
LP
PL
21.
Kalsel
Martapura
LP
PL
22.
Kaltim
Mahakam
LP
LP
LP = ligthly polluted; PL = polluted; HP= highly polluted; Good = not yet polluted

12. 6. WATER SECURITY
Definition by Hoffman (2004): “the ability to access
sufficient quantities of clean water to maintain adequate
standards of food and goods production, sanitation and
health”
UN-Water and its Members and Partners (2013):
Water security is defined as the capacity of a population
to safeguard sustainable access to: i) adequate
quantities of acceptable quality water for sustaining
livelihoods, human well-being, and socio-economic
development, ii) for ensuring protection against waterborne pollution and water-related disasters, and iii) for
preserving ecosystems in a climate of peace and
political stability.

13. Water Storage per person (m3)
7000
6150
6000
4729
5000
4000
3255
3000
2486
2000
1287
1406
746
1000
43
54
A
m
er
ic
a
al
ia
us
tr
N
or
t
h
A
ra
zi
l
B
hi
na
C
La
os
Th
ai
la
nd
ia
In
do
ne
s
ca
fri
A
So
ut
h
Et
hi
op
ia
0

14. V. Water Resources Status (5)
Plan to achieve MDGs in 2015
Proportion of house hold having access to a safe and clean water in 2009
47.71% to be increased in 2015 68.87%

15. Policies to Achieve MDGs Target (1)
Policy Direction:
1. Increase coverage and quality of water supply service in consistent and
staging manner
2. Decrease water losses level through improvement and rehabilitation
3. Priority of water supply development is given to low income community
4. Increase allocation of funding for development of water supply system
through alternative funding sources
5. Strengthen financial capacity of local water supply public company

16. Policies to Achieve MDGs Target (2)
Plan to Achieve MDGs target
1. Plan of achievement based on National Medium Term Development
Plan (2004-2009) or “Interim Achievement of MDGs” 2009:
• Increase of coverage of pipe system by 30% in 2009 (in 2004 18%)
• Decrease of coverage of protected non-pipe system by 51% in 2009 (in
2004 61%)
• Decrease of coverage of unprotected non-pipe system by 19% in 2009
(in 2004 21%)
Estimated total cost about US$ 2,500million, 40-50% will be funded by central and local
governments including loans and grants from international funding agencies. The rest is
expected from commercial investment schemes
2. Plan of achievement of MDGs by 2015:
• Increase of coverage of pipe system by 46%
•
Decrease of coverage of protected non-pipe system by 36%
•
Decrease of coverage of unprotected non-pipe system by 18%

17. Jumlah puting beliung 12x

18. Watershed and River Condition
Impact of Floods and Droughts
1. Decrease of rice production due to floods (about 374,000 ha/yr or
equal to 919,000 ton rice/yr) or due to droughts (about 350,000
ha/yr or equal to 700,000 ton rice/yr).
2. Urban floods also caused significant economic lossess due decrease
of productivity of service and industrial areas and traffic jams
3. In Jakarta 1 hour traffic jam due to road innudation causes
economic loss of Rp 1.5 billion RP
Apakah dampak dari kerusakan
DAS, tanah longsor, polusi,
sedimentasi telah menyebakan
kenaikan biaya O& M, serata
mengurangi pendapatan dalam
Penegeloaan Wilayah Sungai??

19. Financial Performance 2001 - 2010

20. Watershed and River Condition
Impact of Climate Change
Impact of the rise of sea water level due to global warming :
 This will directly affect to socio-economic life of about 16
milion peoples in 10.666 villages in coastal areas.
 More productive areas in coastal area will flooded and this will
be occured more frequently and in incrasing intensity.
 Erotion and abration of of coastal areas will spread over.
 Retreat of coastal line.

21. 7. FOOD SECURITY

22. ARAH KEBIJAKAN
KETAHANAN PANGAN
•
Def : Gizi cukup dan berimbang
• Produksi nasional cukup
problem pada aksesibilitas
• No global trading (mandiri)
KONTRIBUSI PEMBANGUNAN
POSISI 2004
(SWASEMBADA
BERAS)
• Produksi Nasional : 54,01 jt ton GKG
• Luas panen
: 11,9 jt Ha
• Laju pertumbuhan : 1,46%
)
SASARAN
KETAHANAN PANGAN)
IRIGASI PER TAHUN (2005-2009
• REHAB
Eq. 200.000 Ha AT
500.000 Ha
• LANJUTAN Eq. 90.000 Ha AT
100.000 Ha
• PENINGKATAN Eq.10.000 Ha AT
60.000 Ha
AT
?
• Laju
pertumbuhan 1,46%
Eq. 175.000 Ha AT per
th
• DEGRADASI PRASARANA
(O&P)
• DAMPAK BENCANA
ALAM
• ALIH FUNGSI LAHAN
• PENURUNAN DEBIT
SUNGAI
22

23. LUAS TARGET IRIGASI
2009
7,2 JUTA HA
TERBANGUN
BELUM TERBANGUN
6,7 JUTA HA
0,5 JUTA HA
KONDISI RUSAK
KONDISI BAIK
1,5 JUTA HA
5,2 JUTA HA
RUSAK BERAT
RUSAK RINGAN
SUDAH SAWAH
BELUM SAWAH
LUAS TARGET
IRIGASI 2009
340 RIBU HA
1,16 JUTA HA
4,9 JUTA HA
0,3 JUTA HA
7,2 JUTA HA
TERBANGUN
BELUM TERBANGUN
7,2 JUTA HA
0
KONDISI RUSAK
KONDISI BAIK
0
7,2 JUTA HA
RUSAK BERAT
RUSAK RINGAN
SUDAH SAWAH
BELUM SAWAH
0
0
7,2 JUTA HA
0
23

24. Ratio of Rice Field and Population (ha/person) and Rice Yield (ton/ha) in 2010
Countries
Brunei
Cambodia
Indonesia
Malaysia
Myanmar
Lao PDR
Philippines
Singapore
Planted
Area
(1000ha)
(2)
1.30
2,585.91
12,993.28
670.52
8,089.65
818.62
4,525.51
---
Thailand
Vietnam
11,229.94
7,400.20
(1)
Population
(1000)
0.417
14,478
244,769
29,322
46,734
6,374
96,474
5,266
Ratio planted
area &
population
(4)=(2): (3)
0.003
0,17
0.010
0,022
0,172
0.128
0.047
---
69,892
89,790
0,160
0.082
(3)
Production
(1000 ton)
Rice yield
(ton/ha)
(5)
(6)=(5): (2)
4.9
2.83
4.98
3.73
4.02
3.86
3.69
6.37
7,315.93
64,776.46
2,499.54
32,487.08
3,163.88
16,940.81
----31,277.35
38,800.00
2.79
5.24

25. Self-sufficiency Ratio
(ratio rice production to domestic utilization)
Unit: Ton
2009
Country
2010
Domestic
Utilization
Production
Ratio (%)
Domestic
Utilization
Production
ASEAN
125.449.397
107.867.551
Brunei
869
33.797
2,57
4.140
38.056
10,88
Cambodia
4.590.000
2.927.000
156,82
4.682.193
2.961.392
158,11
Indonesia
40.346.922
38.433.251
104,98
40.938.721
38.904.962
105,23
Lao PDR
1.820.750
1.764.642
103,18
1.898.330
1.825.961
103,96
Malaysia
1.585.708
2.531.159
62,65
1.641.985
2.590.004
63,40
Myanmar
20.196.456
19.157.000
105,43
20.466.859
19.346.000
105,79
Philippines
10.737.201
13.163.706
81,57
11.079.288
13.421.363
82,55
-
262.000
-
-
270.000
-
Thailand
20.889.417
11.267.000
185,40
20.643.048
11.767.000
175,43
Vietnam
25.282.075
18.327.996
137,94
25.220.000
18.458.458
136,63
Singapore
116,30 126.574.564 109.583.196
Ratio (%)
115,51

26. Food Security Ratio
(ratio rice stock to domestic utilization)
Unit: Ton
2009
Country
Production
2010
Domestic
Utilization
Ratio (%)
Production
Domestic
Utilization
ASEAN
20.592.404
107.867.551
19,09
Brunei
15.505
33.797
45,88
14.871
38.056
39,08
Cambodia
128.000
2.927.000
4,37
320.000
2.961.392
10,81
Indonesia
1.172.435
38.433.251
3,05
3.269.647
38.904.962
8,40
Lao PDR
30.169
1.764.642
1,71
86.276
1.825.961
4,72
Malaysia
275.899
2.531.159
10,90
424.867
2.590.004
16,40
Myanmar
4.345.208
19.157.000
22,68
4.717.664
19.346.000
24,39
Philippines
2.638.287
13.163.706
20,04
1.849.937
13.421.363
13,78
55.000
262.000
20,99
40.000
270.000
14,81
Thailand
6.251.800
11.267.000
55,49
7.374.217
11.767.000
62,67
Vietnam
5.680.101
18.327.996
30,99
6.684.180
18.458.458
36,21
Singapore
24.781.659 109.583.196
Ratio (%)
22,61

27. 9 Water Resources Financing Implementation
Plan 2004-2010

28. Water Resources Investment Source
Water Resource Investment Funding
Source
2004 – 2009
(%)
2010 – 2014
(%)
Government
70
62,33
Loan
25
24,25
Foreign Aid (Grant)
5
4,60
Private Sector (KPS Air Minum)
2.8
8.82

29. Water Resources Funding Allocation
Water Resources Program
2004 – 2009
(Rp T)
2010 – 2014
(Rp T)
1
Water Resource
6,29
10,79
2
Irrigation
18,10
29,98
3
Raw Water Supply
1,57
2,40
4
Flood Control Management
10,05
16,79
36,01
59,96
Total
Notes:
1. Increase of 66,5% budget allocation for 2010 – 2014
2. Food Security Program in 2013 Irrigation improvement Rp19,8 T (111.251 Ha &
275 unit Embung)
3. Food Security for increase of food production Rp 63,2 T (3x Tahun 2007)

30. Physical Target of Water Resources Development
Water Resource Implementation Program
1
New Construction of Irrigation
Networks
2
Target of 2004 – 2009
(Completed)
Target of 2010 – 2014
(Under Construction)
494.853 Ha
500.000 Ha
Rehabilitation of Irrigation Netwokrs
1.387.968 Ha
1.340.000 Ha
3
Operation and Maintenance of
Irrigation Networks
2.002.275 Ha
11.120.000 Ha
4
Upgrading and Maintenance of
Swamp Reclamation Networks
1.015.199 Ha
548.500 Ha
5
Operation and Maintenance of
Swamp Reclamation Networks
647.895 Ha
5.444.277 Ha
6
Flood Control Infrastructure
9.555 KM
1700 KM
7
Raw Water Supply Capacity
16,13 M3/second
56,3 M3/second
8
Coastal Protection Infrastructure
96,30 KM
50 KM
9
Conservation of Watersource Area
-
63 Watersheeds
10
New Construction of Reservoir, Situ,
and Embung
-
252 Unit
11
Rehabilitation of Reservoir, Situ, and
Embung
-
440 Unit

31. 9. Recommendations (1)
9.1 Identification funding need for water
resources management:
• Activities for conservation of upstream watershed to stop
degradation of function of watershed
• Management of surface and ground water quantity
• Management of water quality and water pollution control
• Management of flood control
• Management of river environment including biodiversity
• Management of water resources infrastructures for O&M of
water sources, river systems, infrastructures
• Capacity building for public participation in inclusive and
comprehensive manners

32. 9. Recommendations (2)
9.2 Identification funding need for water service
management:
• Agreement in the cost sharing between local & central
governments, public utility in consumers in cost for planning &
design, investment and O&M of water service systems
• Activities for planning, design, O&M and monitoring &
evaluation of water service systems
• Expanding investment in water service systems that include
drinking water supply, waste water and sanitation to achieve
the MDGs by 2015
• Extra efforts and funding to settle current outstanding debts of
local government drinking water utilities including for cost
recovery
• Capacity building for public participation in inclusive and
comprehensive manners

33. 9. Recommendations (3)
9.3 Identification of source of funding for water
resources and water service managements:
• Local governments (province & district) budget and central
government budget
• Users and beneficiaries in term of tax, fees, polluter charges
and penalty for party or individual against watershed
conservation rules
• Semi and/or private sector investors in term of issuance of
bonds and ownership share, etc
• International funding institution in term of grants, soft loans,
guarantees, etc
• Innovative funding such as “debt swap mechanism”, and
• Implementation of “Kyoto protocol” especially for develop
countries in term of “clean development mechanism”
incentives for developing countries to protect natural forest for
carbon absorption

34. 9. Recommendations (4)
4.4 Identification of measures to ensure proper
fund management:
• Implementation of “good governance” principles such as:
effective, efficient, transparency, accountable and participative
in a consistent manner
• Implementation of principle: “funds from water must return for
water”
• Implementation of assurance of service principle
commensurate amount fees and charges being paid
to
• Issuance of periodic report to relevant stakeholders on fund
usages and services enhanced to public
• Implementation
consistent
monitoring
and
evaluation
procedures and mechanisms by relevant authorities including
public

35. 9. Recommendations (4)
9.4 Identification of measures to ensure proper
fund management:
• Implementation of “good governance” principles such as:
effective, efficient, transparency, accountable and participative
in a consistent manner
• Implementation of principle: “funds from water must return for
water”
• Implementation of assurance of service principle
commensurate amount fees and charges being paid
to
• Issuance of periodic fund usages and services enhanced to
public
• Implementation
consistent
monitoring
and
evaluation
procedures and mechanisms by relevant authorities including
public

36. 9. Recommendations (5)
9.5 Identification of institutional issues to be
proposed to government:
• Formulation of implementing government regulations and other
rules conducive for
* participation private sectors, users, and beneficiaries
* implementation of “good governance” principles
• Public capacity building programs to ensure improvement and
increase of public participation
• Improvement measures to improve performance of water
service provider and increase public participation by considering
the following model and suggestions

37. A Model on Urban Water Supply Management for
Sustainable Livelihoods
Policy
Makers
Vulnerability
Context
Sustainability
Context
Urban
Water Supply
Providers
Households

38. Some Key Points
• Participation of the society
• Strong commitment from the workers and
management
• Independency of the water supply
provider
• Taxes based on benefit principle, cost
recovery, polluter-pay principle and
solidarity principle in a local or regional
catchment area could contribute to IWRM
and solve financial problems

39. A Governance Model for Urban Water
Supply Financing
Governments
Financial
Market
share of
capital
loan
Water
Banks
Urban
Water Supply
Providers
interest
subsidies
subsidies
share of
Households
ownership

40. Strategic Business Planning Model
Element 1
Goals and Needs
Element 2
Long-range
Strategic Elements
Element 3
Short-range Business
Plans/Implementation
Programs
Community
Utility mission/
Vision
customer needs
Overarching utility policies
Financial Program
Regulatory compliance
Stakeholder
Objectives
Regulatory
agencies
requirements
Master plan& related documents
Management actions
Construction projects
Agreement/contracts
evaluation & adjustment
Public affairs & outreach

41. Implementation
improve management
performances
Regulations
● public participation
● public-public partnership (unhealthy with
healthy PDAM)
improve coverage
● co-operatives
● public initiatives
financial resources
● water bank
● water taxes or charges