In the coastal city of Dumai, Indonesia, access to clean water was once a daily struggle. Residents like Dede Handayani, a mother of two, spent up to US$64 a month buying water from vendors while relying on well water for washing and gardening. Local businesses also struggled to maintain hygiene, and the municipal water utility, PDAM Dumai Berseri, lacked the resources to upgrade its filtration systems. Balancing the need for investment with affordability posed a major challenge for the community.
Indonesia’s geography, with over 17,000 islands and vast coastlines, compounds its water access issues. Despite the country’s abundant freshwater resources, nearly half the population lacks safe water, and only a third of urban residents have piped services. To address this, the Government of Indonesia launched the National Urban Water Supply Project (NUWSP) with support from the World Bank and other partners to improve access and strengthen urban utilities.
By 2020, new water infrastructure had been completed in Dumai, transforming the city’s water supply system. The local utility expanded its service from just 200 customers in 2019 to nearly 10,000 households and businesses by 2024. Financially, it shifted from operating at a loss to covering all operational costs, enabling it to pay staff salaries and create new jobs. For residents, the impact was life-changing. Dede now pays only US$16 a month for safe water, saving time and money while improving her family’s health and quality of life. Local entrepreneurs, too, have benefited from reliable water access that supports their businesses.
NUWSP’s success stems from its integrated approach combining infrastructure investment, technical assistance, and financial incentives for local governments. The program mobilized around US$160 million from non-public sources and helped 21 utilities access private or domestic financing. Dumai’s improved water services also attracted private investment, boosting industrial confidence and job creation.
The project introduced innovative technologies, such as Hollow Fibre Nano Filtration (HFNF), which treats peat water efficiently by removing organic materials and pathogens. By November 2024, NUWSP had improved water access for over 8.4 million Indonesians—half of them women—and prioritized connections for urban poor households.
Beyond infrastructure, the project focused on building utility capacity through training, technical assistance, and performance tools. All participating utilities improved their operations, with 41 advancing to higher performance categories. With national safe water coverage projected to boost Indonesia’s GDP by 1.2 percentage points by 2045, Dumai’s transformation demonstrates how targeted partnerships and innovative solutions can create lasting change and serve as a model for other municipalities across the country.
