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Australia helping the Indonesian water sector overcome key water challenges

Although Indonesia enjoys 21% of the total freshwater available in the Asia-Pacific region, many of the country’s water issues are tied to its rapid development, poor urban infrastructure, and stretched institutional capacity.

Economic growth has not been accompanied by a corresponding expansion of infrastructure and institutional capacity. As a result, nearly one in two Indonesians lack access to safe water, and more than 70% of the nation’s 260 million people rely on potentially contaminated water sources.

The country has also undergone significant land use changes, including deforestation. Extractive industries have polluted waterways and altered the landscape, leaving many areas more vulnerable to extreme events such as monsoon floods.   

The Australian water sector is supporting the Australian and Indonesian Governments to overcome these challenges through the Department of Foreign Affairs and Trade (DFAT)-funded Indonesia Australia Partnership for Infrastructure program (KIAT).

This initiative builds on a legacy of investment by the Australian Government across Indonesia’s water sector and continues the work achieved through the Indonesia Infrastructure Initiative.

A focus of the KIAT program is the preparation of performance-based grants through the Indonesian Government, which ensure that Indonesian regional drinking water companies (PDAMs) are rewarded financially for achieving a desired level of service.

Key PDAM challenges

Indicator Current Status 2019 Target
Access to safe drinking water (both piped and non-piped water services) 73.6% 100%
Healthy PDAMs 59.6% 100%
Service (piped network) coverage 32% >60%
Non-Revenue Water 33.2% <20%
Implementation of Water Safety Plans 12 174
Investment US$500 million per year US$4 billion per year and Full Cost Recovery
Number of PDAMs 378
Urban population growth rate approximately 750,000 households/year
PDAM connection growth rate approximately 550,000 connections/year

More recently, the Australian Water Association (AWA), in partnership with its Indonesian memorandum of understanding partner, the National Water Supply Association for Indonesia (PERPAMSI), is supporting the delivery of a Water Utility Improvement Program (WUIP).

PERPAMSI has experience coordinating Water Operator Partnership Programs within Indonesia, and is currently facilitating mentor programs to transfer knowledge from more established PDAMs to their less established counterparts.

The WUIP connects three PDAMs with three Australian water utilities, with the aim of exchanging knowledge and tools to support the development of skills that will contribute to the objectives of the KIAT program.


The WUIP is supported by the Australian Water Partnership and runs for two years, to enhance the capacity of PDAMs to overcome their water challenges and aligns to the Indonesian Government objectives of:

  • improved water quality and reliability;
  • improved operational efficiency; and
  • improved financial sustainability.

To prepare for the WUIP and begin the process of matching Australian utilities and PDAMs, the AWA recently visited many of its stakeholders in Indonesia, including: PERPAMSI; BPPSAM, the Indonensian agency responsible for administration of drinking water systems; DFAT; KIAT; ANZ Bank; the World Health Organisation; and planning agency BAPPENAS.

Matched utilities include:

  • Yarra Valley Water and PDAM Kabupaten Gianyar
  • South Gippsland Water and PD PAL Jaya (Jakarta)
  • Unitywater and PDAM Surabaya

The AWA will host an Indonesian delegation at Ozwater'19, including the PDAMs participating in the Water Utility Improvement Program.

Contact Robbie Goedecke if you would like to meet the PDAMs and get involved in the WUIP.