Indonesia Says No New Dams Will Be Completed in 2027 as Budget Constraints Stall Infrastructure Push

JAKARTA, Investortrust.id — Indonesia's Ministry of Public Works expects no dam projects to be completed in 2027 after budget constraints forced the government to prioritize ongoing construction instead of delivering new infrastructure, highlighting mounting fiscal pressure on one of President Prabowo Subianto's key development agendas.

The ministry said limited funding will be directed toward keeping 14 existing dam projects alive rather than bringing any of them into operation next year.

The delay could postpone new irrigation capacity, raw water supplies, flood mitigation and renewable energy opportunities at a time when Indonesia is seeking to strengthen food security and climate resilience.

For contractors, infrastructure investors and local governments, the announcement also signals a slower pace of public infrastructure spending despite the country's long-term development ambitions.

Funding Falls Short

Arnold Aristoteles Paplapna Ritiauw, Director General of Water Resources at the Ministry of Public Works, said his agency received an indicative 2027 budget ceiling of Rp25.44 trillion ($1.60 billion).

Of that amount, only Rp3.58 trillion ($225 million) has been earmarked for dam and lake projects.

"The allocation is focused on continuing ongoing dam construction with very limited funding, while several lake revitalization projects will be financed through sovereign Islamic bonds," Arnold told lawmakers during a parliamentary hearing on Wednesday.

No Completions Expected

Arnold said funding from the state budget remains well below what is required.

The ministry needs around Rp9 trillion ($566 million) to meet existing multi-year contract commitments but currently has only about Rp2 trillion ($126 million) available.

"This will inevitably affect dam projects that were previously targeted for completion in 2027," he said.

According to Arnold, construction delays could also create broader risks, including dam safety concerns, environmental impacts and slower delivery of irrigation and clean water infrastructure.

Projects Continue Despite Delays

The government will continue construction on 14 dams across the country, including projects in South Sumatra, West Java, Central Java, East Java, South Kalimantan, East Nusa Tenggara, West Sulawesi, Gorontalo, South Sulawesi and Maluku.

Funding will also support the construction of the Aceh Ruko River Training Structure and lake revitalization projects at Lake Ranau, Lake Limboto and Lake Ayamaru.

"With this very limited allocation, we estimate that no dam construction projects will be completed in 2027," Arnold said.

Infrastructure Budget Gap Widens

The announcement comes as the Ministry of Public Works faces a widening funding shortfall.

Public Works Minister Dody Hanggodo previously said the ministry requires Rp219.81 trillion ($13.82 billion) to implement its 2027 infrastructure program.

However, the government has allocated only Rp98.47 trillion ($6.19 billion), leaving a financing gap of Rp121.34 trillion ($7.63 billion).

According to Dody, the ministry's funding request was based on Indonesia's national infrastructure development plan, existing contractual commitments and projects supporting the government's broader economic agenda.