Coordinating Minister for Infrastructure and Regional Development, Agus Harimurti Yudhoyono (AHY), has announced plans to implement a Land Value Capture (LVC) scheme to attract foreign investment for the ambitious Giant Sea Wall project. 

The initiative, aimed at protecting the northern coastline of Jakarta from land subsidence and rising sea levels, is still in the planning stage and facing several key challenges.

Speaking at the Ministry of Public Works on Friday, May 9, 2025, AHY cited that the Giant Sea Wall development will also incorporate coastal residential areas.

“One of the components of the Giant Sea Wall plan includes new coastal housing developments, which will involve coordination with local governments. It’s not an easy task, but the planning must continue to be closely monitored,” AHY said on Friday, May 9, 2025.

LVC, a funding model that leverages the increased land value generated by public infrastructure projects, is expected to help develop the sea wall area into a commercial hub encompassing business centers, tourism, and sports facilities.

AHY emphasized that the project’s construction plan is still under deliberation among several ministries, including the Ministry of Public Works, Ministry of Transportation, Ministry of Agrarian Affairs and Spatial Planning, and the Ministry of Public Housing and Settlement Areas.

The complexity of inter-agency coordination has slowed progress. Deputy Minister of Public Works, Diana Kusumastuti, noted that although investment talks − particularly with South Korea − are underway, implementation remains on hold pending the completion of a detailed construction blueprint.

“There is still much we need to study. The current planning documents from the previous coordinating ministry remain too macro. To move forward, we need clear assignments and detailed construction planning,” Diana said on April 23, 2025.

It’s worth noting that project oversight has recently shifted from the Coordinating Ministry for the Economy to the newly formed Cordinating Ministry f orInfrastructure and Regional Development. According to Diana, the earlier plans lacked the technical depth necessary for implementation.

International support

In addition to potential investment from Korea, the Netherlands has expressed interest in supporting the project with grants and loans amounting to €300 million (Rp5.7 trillion). These funds would be directed toward strategic projects in water and energy infrastructure, including the Giant Sea Wall.

While the full cost of the entire project has yet to be finalized, the initial phase − focusing on the construction of a sea barrier off Jakarta’s coast − is estimated to require Rp164.1 trillion.

Experts consider the Giant Sea Wall a critical infrastructure effort, given the alarming environmental threats facing the Jakarta coastline. Land subsidence rates range from 1 to 25 centimeters per year, while sea level rise in some areas is recorded at 1 to 15 centimeters annually. These factors significantly increase the risk of tidal flooding, especially in low-lying neighborhoods.

AHY reiterated that while the path forward may be complex, the Giant Sea Wall is an essential investment in climate resilience and urban safety. By using the LVC mechanism, the government hopes to finance the project sustainably while spurring economic development through new urban zones.

Despite the hurdles, the government is committed to refining the project plan and securing both domestic and international collaboration. As climate and urban risks mount, the pressure to finalize and implement this long-awaited project grows ever more urgent.