Indonesia Water Fund (IWF): An Effort to Improve Clean Water Access
The government released the Indonesia Water Fund (IWF) program which is part of efforts to improve access to clean water for all Indonesians. IWF was initiated by the Ministry of State Owned Enterprises (SOEs) through the synergy of Danareksa SOEs Holding which includes Danareksa, Nindya Karya, Perum Jasa Tirta I, and Perum Jasa Tirta II. This synergy is to provide accessible water distribution to various regions in the country.
IWF focuses on three pillars that offer an investment approach with sustainable benefits and provide access to clean water that is integrated from upstream to downstream. IWF is run according to an investment model that fits the investor profile with a scheme that is easily replicated throughout Indonesia.
The role of strategic partners is certainly needed in the IWF program in order to achieve optimal results in the operation process. The Minister of State Owned Enterprises (SOE), Erick Thohir said that providing access to clean water has become a global issue. In Indonesia, there are still a number of areas where people find it difficult to get access to clean water, and even have to pay a certain amount of money to get clean water.
"We think it is very unfair when people who can't afford it have to buy water or use very expensive water," he said at a press conference at the State Owned Enterprise (SOE) International Conference, Monday (17/10).
The National Socio-Economic Survey (Susenas) in 2021 showed that households with access to safe drinking water in Indonesia only reached 90.8%, of which around 12% of households had access to safe drinking water and approximately 19% had access to piped drinking water.
Meanwhile, according to data from the Danareksa Research Institute, water consumption is increasing in line with the increase in population. However, water scarcity is a major problem in some countries and together with poor water quality is the cause of the spread of disease. In the future the issue of water scarcity and quality must be a priority for many parties.
For the initial target, IWF will manage funds of US$ 1 billion or around Rp 15 trillion from strategic partners to improve access to clean water for 40 million Indonesians. IWF's principle is to provide an investment platform that is easy to replicate, so that additional house connections to accelerate access to clean water can continue to be made.
Erick added that IWF is a quick solution for equitable access to clean water, accelerating the provision of clean water that is inclusive, sustainable and efficient for all Indonesians, while expanding the scope of national clean water.
So far, the realization of investment or financing for the water and sanitation sector has not met the existing needs. Then, IWF becomes a form of funding for clean water that runs side by side with the APBN independently, so that it does not burden the APBN directly. As an alternative to financing the irrigation sector, IWF will involve SOEs, the private sector, and investors.
"IWF is an effort to maximize national GDP. Insufficient water supply has the potential to reduce Indonesia's GDP by 2.5% in 2045," Erick concluded.
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