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Workshop on SPAM Alternative Financing through Pool of Funds Scheme in Surakarta City

On March 28, 2019, DPD PERPAMSI (Dewan Pengurus Daerah Persatuan Perusahaan Air Minum Seluruh Indonesia/Regional Board of the Association of Indonesian Drinking Water Companies) of Central Java chapter, in collaboration with USAID IUWASH PLUS, conducted a workshop on SPAM (water supply system) alternative financing through Pool of Funds scheme in Surakarta city, Central Java.

The objectives of the workshop are to introduce the pool of funds concept developed by USAID IUWASH PLUS to several local governments and PDAMs in Central Java province as the location of the pilot of the Pool of Fund; and to assess the local government and PDAM responses to the Pool of Funds initiative. Central Java province has been selected as the location of the Pool of Funds pilot based some aspects, which include the positive response from Bank Jateng to the initiative by which they are interested to house the product.

The pool of funds is an alternative funding source for the PDAM to improve its services and coverage to reach the 100% service coverage as mandated by national policy. Through pool of funds scheme or as the revolving model, the local governments place some amount of money into the bank and the PDAM uses it for financing the investment. The lower interest rate and longer repayment period would become the main features of the product. The process to access the pool of funds would be similar to other loan procedures that viability of the project being financed is the main pre-condition required by the bank.

The event resulted in positive outputs where all participants demonstrated its supports to the initiative. The highlighted inputs to the concept included (1) local government would require specific regulations to implement the pool of funds by placing their fund for the product and (2) direct socialization of the pool of funds to the heads of regions is required to get clear signal from the local government to the initiative.

“We hope pool of fund becomes a breakthrough for PDAMs to improve their service,” said Samino the Chairperson of DPD PERPAMSI of Central Java chapter.

Around 26 people representing Bappeda, Economic Division of the government cities in greater Surakarta, which include Surakarta, Sragen, Klaten, Karanganyar, Sukoharjo, Boyolali, and Wonogiri, and their respective PDAM participated in the workshop.