Minister of Public Works, Dody Hanggodo, has indicated plans to revise Law No. 17/2019 on Water Resources to open the door for private investment in dam construction through public-private partnership (PPP) schemes. 

“There are several laws that need to be revised, and that’s part of our homework. I believe this can be resolved quickly,” Dody told a media conference in Jakarta on Tuesday, June 3, 2025.

Currently, two dam projects are being prepared under a PPP scheme − the Merangin Dam in Jambi and another in Central Java. Although documents of readiness for both projects have been prepared since 2021, neither has progressed to the tender stage due to legal constraints under the Water Resources Law.

Dody emphasized the success of a similar model with the Cirata Floating Solar Power Plant, which was built on the submerged area of the Cirata Dam with an investment of Rp1.7 trillion (US$104 million). He expressed confidence that such a model could also be applied to dam construction.

“There’s only one condition I ask of investors who want to build dams − do not forget the social function, especially irrigation. That’s non-negotiable,” he said.

The main legal obstacle to PPP-based dam construction lies in Article 5 of the Water Resources Law, which asserts that water resources are controlled by the state and must be utilized for the maximum welfare of the people. This provision has been interpreted as limiting private sector involvement.

In 2024, Arvi Argyantoro, Director of Water Resources Infrastructure Financing Implementation at the ministry, confirmed strong investor interest in the Merangin Dam project. A total of 11 investors have shown interest, with plans for a mixed-return scheme involving both availability payments (AP) and tariffs.

The Merangin Dam project is valued at Rp3.73 trillion, and the selected bidder will receive a 30-year concession with an internal rate of return (IRR) of 10 percent. Foreign investors from countries including South Korea, China, and Germany have also expressed interest.