Turning the Tide: Dumai’s Journey to Clean Water in Indonesia

In the coastal city of Dumai, Indonesia, clean water was once a luxury. Residents like Dede Handayani, a mother of two toddlers, faced steep costs just to access clean water. She paid up to US$64 (Approximately IDR 1,000,000) a month, relying on a mix of well water for gardening and washing and local vendors for her family’s drinking and cooking needs. It was a daily struggle that consumed time, energy, and resources.

Local businesses struggled to maintain hygiene, and the municipal water utility, PDAM Dumai Berseri, faced mounting challenges. “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.”

Dumai’s story is not unique. Across Indonesia, rapid urbanization and geography—17,000 islands and 90,000 kilometers of coastline—make water access a complex challenge. Despite abundant freshwater resources, nearly half of Indonesians lack safe water and more than 70% of the nation’s population rely on potentially contaminated sources. Only a third of urban residents have piped water services.

_{Without filtration water in Dumai. Photo: Matahati/World Bank}

Recognizing the urgency, the Government of Indonesia launched the National Urban Water Supply Project (NUWSP) with support from the World Bank and other partners. The project aimed to improve water access and strengthen the capacity of urban water 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.”

The results were transformative. Dumai’s utility expanded from serving 200 customers in 2019 to nearly 10,000 households and businesses by 2024, significantly increased their revenue and turned around their financial situation from a loss-making utility into a utility that can fully cover their operational costs. With this improved situation, the utility has been able to fully pay their staff salary and even recruited more staff to support the operation, creating jobs and opportunities for the local community. “Our operations are now more efficient, straightforward, and easy to monitor,” said Adnan.

For residents like Dede Handayani, the change was life-altering. “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.”

_{Now Dede Handayani can use the tap water for day-to-day washing and cleaning routines. Photo: Matahati/World Bank}

The project also benefited local entrepreneurs. “Before, water deliveries were unreliable,” said Salman, who sells fruit salad and coconut water. “Now, we can wash utensils right away and serve customers confidently”

NUWSP’s approach combined targeted investment, technical assistance, and incentives for local governments and utilities. It encouraged municipalities to invest in their water utilities and leverage funding from non-public sources such as domestic borrowings and private financing. In total, the project mobilized around US$160 million (approximately IDR 2.6 billion) from non-public sources, with 21 utilities reaching financial closure to access non-public financing.

Dumai’s success attracted private sector interest. “Industries are pleased,” said Indra Gunawan, Dumai’s Municipal Secretary. “Now we can guarantee clean water. We expect more investment and businesses to come and bring more jobs and support economic growth.”

_{Salman’s coconut water kiosk benefits from Dumai's clean water. Photo: Matahati/World Bank}

The project also introduced innovative technology, including Hollow Fibre Nano Filtration (HFNF) to treat peat water, used for the first time in Indonesia. Peat water has certain characteristics that is difficult to be treated using conventional technology due to its high pH and color caused by organic molecules. Combined with simple pH adjustment, the HFNF technology effectively removes organic molecules and pathogen, making water safer and cleaner.

By project close in November 2024, NUWSP had provided improved water access to over 8.4 million people, including 4.2 million women. At least 20% of new connections served urban poor households.

NUWSP’s targeted intervention was not only on infrastructure investment, but it was combined with targeted intervention support on technical assistance and capacity building to improve performance and credit worthiness of water utilities. With support from the GWSP and collaboration with other development partners, training modules were updated and tools such as Utility of the Future and Credit Worthiness for Utility have been translated into Bahasa Indonesia. As a result, all utilities participated in the project demonstrated improved performance, with 41 of them were able to graduate to higher performance category.

_{Dumai's clean water. Photo: Matahati/World Bank}

The impact goes beyond water. Full coverage of safe water supply nationally is expected to boost Indonesia’s GDP by 1.2 percentage points by 2045 and reduce the burden on public health systems. NUWSP’s scalable model aligns with Indonesia’s long-term water security agenda and offers a blueprint for other municipalities.

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.