World Bank Approves US$350M Project to Boost Clean, Climate-Safe Cities in Indonesia

Indonesia is experiencing rapid urbanization, with many cities projected to reach 2–5 million residents by 2030, significantly increasing waste volumes.

The World Bank has approved the US$350 million Local Service Delivery Improvement Project (LSDP), a major initiative that will provide cleaner, healthier environments for more than 15 million Indonesians and enhanced climate protection for 10 million. The project aims to transform Indonesia’s solid waste management sector, reduce methane emissions and create stable green jobs—supporting the country’s long-term transition toward a zero-waste, circular-economy future.

Addressing Indonesia’s Growing Waste Challenge

Indonesia is experiencing rapid urbanization, with many cities projected to reach 2–5 million residents by 2030, significantly increasing waste volumes. Although the government’s “Indonesia Bersih (Clean Indonesia)” programme has strengthened policy reforms, infrastructure and recycling measures, gaps remain in capacity, financing and operational performance at the local level.

Home Affairs Minister Tito Karnavian noted the urgency and ambition of the government’s targets:

“The national government is working closely with local governments to address waste problems by 2029. With this support from the World Bank and innovative solutions, we aim to achieve our vision of zero waste by 2050–2060.”

Strengthening Local Governments Through 30 Pilot Areas

The LSDP will begin by supporting 30 local governments across Indonesia, helping them strengthen:

• institutional capacity

• financial management

• operational planning

• circular economy practices

These efforts will address system-wide challenges and lay the groundwork for scalable, sustainable urban services nationwide.

A Strong Partnership for Clean, Climate-Resilient Cities

World Bank Director for Indonesia and Timor-Leste Carolyn Turk emphasized the project's potential:

“This project will promote environmental resilience and build sustainable cities that bring jobs and economic opportunities to communities across Indonesia.”

The project is jointly implemented with the Ministry of Home Affairs and the Ministry of Public Works and Housing, combining national guidance with local delivery.

Three Pillars to Transform Waste Management

The LSDP is structured around three major pillars:

1. National Reforms for Better Sector Performance

• improving source segregation and waste minimization

• expanding waste diversion from landfills

• professionalizing service providers

• ensuring cost recovery and financial sustainability

• strengthening regulatory oversight

2. Performance-Based Grants for Local Governments

For the first time in Indonesia’s solid waste sector, performance-based grants will be rolled out at scale. These grants will reward local governments for:

• improving collection services

• expanding recycling

• reducing landfill waste

• investing in green infrastructure

• advancing climate-smart waste management

This mechanism ensures stronger alignment with national goals and gives cities the financial ability to execute their solid waste plans effectively.

3. Local Capacity Building and Implementation Support

Local governments will receive intensive support, including:

• technical training

• institutional strengthening

• financial planning assistance

• knowledge-sharing platforms

• decentralized project management support

This approach is designed to foster long-term, self-sustaining improvements in urban environmental services.

Advancing a Circular Economy and Green Job Creation

The project will promote the “reduce–reuse–recycle” model and help amplify Indonesia’s circular economy initiatives. Expected impacts include:

• creation of stable green jobs, especially in recycling and waste processing

• significant methane emission reductions, supporting climate commitments

• community participation in waste segregation and recycling

• improved public health outcomes

Supporting Indonesia’s Zero-Waste Vision

By targeting both national systems and local delivery mechanisms, the LSDP will help Indonesia progress toward its 2029 waste management targets and long-term goal of zero waste by 2050–2060.

The project also supports broader national strategies for sustainable urban development, environmental resilience and green economic growth, advancing Indonesia’s leadership in climate action and the circular economy in Southeast Asia.