Residents of Dumai, a coastal city in Indonesia, once faced high costs and limited access to clean water. Dede Handayani, a local mother, described paying up to US$64 per month for water from vendors and spending significant time searching for safe supplies. Local businesses also struggled with unreliable water delivery, impacting hygiene and daily operations.
PDAM Dumai Berseri, the municipal water utility, was challenged by outdated filtration systems and financial losses. “We needed major investment to upgrade our filtration system,” said Agus Adnan, the utility’s manager. “But we also had to keep water affordable for our community.”
Indonesia’s geography—with thousands of islands and extensive coastline—complicates efforts to provide safe water nationwide. Nearly half of Indonesians lack access to safe water sources, and only about one-third of urban residents have piped services.
To address these issues, the Indonesian government launched the National Urban Water Supply Project (NUWSP) with support from the World Bank and other partners. The project aimed to improve urban water infrastructure and build capacity among utilities. “Since 2018, we’ve worked closely with the Ministry of Public Works and Housing and the World Bank,” said R. Satria Alamsyah, Head of Dumai’s Public Works Office. “By 2020, we had new water supply infrastructure in place.”
Following these investments, PDAM Dumai Berseri expanded its service from 200 customers in 2019 to nearly 10,000 households and businesses by 2024. The utility became financially stable, covering operational costs fully and hiring additional staff. “Our operations are now more efficient, straightforward, and easy to monitor,” said Adnan.
For residents like Handayani, monthly expenses for clean water dropped from over US$60 to around US$16 while quality improved significantly. “Before, we had to spend more than US$60 per month (Approximately IDR 1,000,000) to pay the truck to bring water which often not good quality. We now pay US$16 (Approximately IDR 250,000) a month for better quality water that’s safe for consumption,” she said. “I no longer spend hours searching for clean water, and can now spend more time with my children and help them study.”
Local entrepreneurs also benefited from reliable access; Salman, who runs a fruit salad kiosk in Dumai noted: “Before, water deliveries were unreliable. Now we can wash utensils right away and serve customers confidently.”
NUWSP combined targeted investment with technical assistance while encouraging municipalities to seek non-public funding sources such as domestic borrowing or private finance. In total, approximately US$160 million was mobilized from non-public sources through this initiative.
The program introduced new technology including Hollow Fibre Nano Filtration (HFNF), which treats peat water—a challenge due to its high pH levels—making it safer for consumption.
By November 2024 project closeout data showed that NUWSP provided improved access for over 8.4 million people—including at least 4.2 million women—and ensured that at least one-fifth of new connections served urban poor households.
Capacity building was also part of NUWSP’s approach; updated training modules were made available in Bahasa Indonesia along with tools designed to improve utility performance and creditworthiness.
Dumai's success has attracted interest from private sector investors seeking reliable infrastructure as a foundation for business growth in the region. Indra Gunawan of Dumai’s municipal government stated: “Industries are pleased… Now we can guarantee clean water. We expect more investment and businesses to come and bring more jobs and support economic growth.”
Nationally scaling similar projects is expected by experts to contribute positively toward Indonesia’s GDP growth targets by mid-century while easing public health burdens associated with unsafe drinking supplies.
“Dumai’s journey shows what’s possible when communities, governments, and partners come together with the right support and incentives to turn the tide on water access.”