Key insights and market outlook
The Indonesian Parliament is urging the Ministry of Investment and Downstreaming to prioritize the Giant Sea Wall (GSW) project along the northern coast of Java, particularly in Demak Regency, which is experiencing severe coastal erosion and land subsidence. The project, expected to cost billions, aims to protect coastal communities, industrial zones, and national supply chains from rising sea levels and flooding. The Parliament emphasizes the need for regulatory certainty and effective public-private partnership (KPBU) schemes to attract global investors for this massive infrastructure project.
The Indonesian Parliament has called on the Ministry of Investment and Downstreaming to give strategic attention to the Giant Sea Wall (GSW) project along the northern coast of Java. This massive infrastructure project aims to protect coastal areas from rising sea levels, flooding, and erosion, particularly in Demak Regency, which is among the most vulnerable regions.
Demak Regency is experiencing daily tidal flooding and significant land subsidence, with some areas recording 8-12 cm of subsidence per year. The situation is critical, with coastal erosion threatening local fisheries, agriculture, and transportation infrastructure. The Parliament highlights that without immediate intervention, the affected areas could increase by 20-30% in the next decade, posing a significant threat to industrial zones, ports, and national supply chains.
The GSW project is expected to require substantial funding through a hybrid financing scheme. The initial phase will be supported by the state budget (APBN), while subsequent stages will rely on public-private partnerships (KPBU) and international cooperation. Given the project's massive scale, with an estimated construction length of 500-700 kilometers, involving global investors is considered essential.
The Parliament stresses that the Ministry of Investment and Downstreaming plays a critical role in facilitating this project. Key responsibilities include: engaging with potential investors, facilitating partnerships, and ensuring effective implementation of KPBU schemes. Regulatory certainty and streamlined facilitation processes are seen as crucial factors in accelerating the project's development.
The successful implementation of the GSW project is expected to provide a long-term foundation for coastal protection in northern Java. The initial phase focuses on the most vulnerable areas, including coastal villages, productive agricultural land, and traditional fishing centers in Demak. By protecting these areas, the project aims to safeguard the livelihoods of coastal communities and maintain economic stability in the region.
The Parliament's push for the GSW project underscores the urgency of addressing climate change impacts in Indonesia's coastal regions. With coordinated efforts between government agencies and effective investment strategies, this ambitious project has the potential to become a model for climate resilience in the region.
Giant Sea Wall Investment Push
Coastal Protection Project Advancement