Citarum Water Resources Management Investment Program

The Citarum River is one of the most critical river basins in Indonesia. Located in the province of West Java, the basin extends over 13,000 square kilometers, which provides home and life to over 10 million people. It supplies about 80 percent of metropolitan Jakarta’s water needs, irrigates over 240,000 hectares of rice and other agricultural crops, and is the source of 1,400 MW of hydroelectric power.

Aiming to address the complex challenges in managing the Citarum water resources, the ADB is offering a package of assistance called Integrated Citarum Water Resource Management Investment Project (ICWRMIP). The proposed Program aims to promote integrated water resources and environmental management within the Citarum River basin that will address challenges to water conservation and allocation. ICWRMIP has many sets of projects that cover watershed management, agriculture, water supply and energy.

This is the first ADB investment to Indonesia under the untested new lending instrument called Multitranche Financing Facility (MFF). The Indonesian public will incur a loan worth US$500 million disbursed over 15 years in various tranches.

Part of ICWRMIP’s first phase is the rehabilitation of West Tarum Canal, an artificial waterway that diverts Citarum water for industrial use and drinking supply of Jakarta households, which runs through West Java. The rehabilitation project will displace 872 households and negatively impact others particularly in the three districts crossed by WTC: Kabupaten Karawang, Kabupaten Bekasi and Kota Bekasi. Yet, the Aliansi Rakyat untuk Citarum (ARUM) or Peoples Alliance for Citarum, a growing network of West Java and Jakarta civil society who reviewed the Resettlement Plan and monitored the Program preparation found serious flaws relative to compliance with the ADB’s Involuntary Resettlement Policy and other applicable policies.

The Project has an environmental category B and resettlement category A, which means it will have significant social and environmental impacts. Transparency and governance gaps were also identified – which formed as grounds for an informed engagement of local and national support groups and the affected communities to influence the process, content and decision on the program.

ARUM called on the ADB Board of Directors to pull out from investing into the ICWRMIP unless a significant, meaningful, strongly and broadly supported re-assessment of the entire program is undertaken.

Approved Financing

MFF: Integrated Citarum Water Resources Management Investment Program – Project 1
Ordinary Capital Resources: US$20.0 million
Asian Development Fund: US$30.0 million

Multi-Tranche Financing Facility: Multitranche Financing Facility – Integrated Citarum Water Resources Management Investment Program
Ordinary Capital Resources: US$470.0 million
Asian Development Fund: US$30.0 million

Technical Assistance: Institutional Strengthening for Integrated Water Resources Management in the 6 Cis River Basin Territory
Water Financing Facility-Multidonor TF: US$2.0 million
Technical Assistance Special Fund: US$1.0 million
Netherlands Fund (with LoA): US$5.0 million

Technical Assistance: Integrated Citarum Water Resources Management Project (Supplementary)
Global Environment Facility: US$200,000

Technical Assistance: Integrated Citarum Water Resources Management (Supplementary)
Technical Assistance Special Fund: US$460,000
ATF Spanish TA Grant: US$250,000

Technical Assistance: Integrated Citarum Water Resources Management (Supplementary)
Technical Assistance Special Fund: US$275,000

Technical Assistance: Integrated Citarum Water Resources Management
Technical Assistance Special Fund: US$1.0 million

Total Approved Financing: US$7.8 million

plus an additional 272.1 million in proposed finances which the Bank aims to get approved between 2009 and 2011.

Bank Contacts:

ADB- Arjun Thapan, Director General, Southeast Asia Department
tel: +632 632 6201
athapan@adb.org

ADB- Urooj Malik, Director, Agriculture, Environment and Natural Resources Division
tel: +632 632 6234
umalik@adb.org