Alfida Rizky Febrianna, Jakarta – The Public Works Ministry has revealed that Indonesia requires an additional Rp 753 trillion ($46.14 billion) to finance infrastructure projects through 2029, despite substantial budget allocations. The shortfall is expected to be addressed through creative financing methods, including increased investment.
Public Works Minister Dody Hanggodo said that according to the 2025-2029 National Medium-Term Development Plan (RPJMN), the total infrastructure funding needed is projected at Rp 1,905.3 trillion. However, the state budget (APBN) can only cover Rp 678.91 trillion or 35.63 percent of the total, while regional budgets (APBD) contribute Rp 473.28 trillion, about 24.87 percent.
"With current fiscal constraints, both APBN and APBD combined still leave a funding gap of Rp 753 trillion, which is 39.5 percent of the total requirement," Dody said at the annual Creative Infrastructure Financing Day (CreatIFF) 2025 event in Jakarta on Tuesday.
The infrastructure budget will focus on three main areas: water resources, roads and bridges, and housing. Targets include rehabilitating 25 dam units, increasing water storage capacity per capita, building and rehabilitating irrigation areas, and expanding water supply infrastructure. For transportation, the goals include ensuring 98 percent of national roads are in good condition and reducing travel time to 1.7 hours per 100 km on main routes. Housing targets aim to increase safe drinking water access, domestic wastewater treatment, and managed waste processing.
To close the funding gap, the ministry is promoting financing schemes such as public-private partnerships (KPBU), blended financing, and asset securitization. Dody stressed the importance of collaboration among the central and local governments, investors, businesses, universities, and the community to meet infrastructure development goals.
"I will continue to urge all levels of the Public Works Ministry, especially the Directorate General of Infrastructure Financing, to develop various creative financing models that have potential," Dody said.
He added that the ministry is committed to building an inclusive, transparent, and accountable financing ecosystem to attract both domestic and foreign private investment for sustainable infrastructure development.
"The success of infrastructure projects depends not only on the government but also on active participation from the private sector and all elements of society. I invite all parties to strengthen collaboration, increase synergy, innovate, and work together to find alternative sustainable funding sources," Dody concluded.
Source: https://jakartaglobe.id/news/indonesia-faces-46-billion-infrastructure-funding-gap-through-202