Jakarta, Indonesia Sentinel — Indonesia’s Ministry of Housing and Settlements is preparing to use a $1.5 billion loan offer from the World Bank (approximately Rp24.5 trillion) to renovate inadequate housing in urban slum areas.
Fitrah Nur, Director General of Human Settlements, said the government’s efforts had previously focused on upgrading slum neighborhoods but will now go further.
“With this loan, we’re not only improving slum areas but also directly targeting uninhabitable homes within those neighborhoods. This way, we can address problems comprehensively in one package,” Fitrah told reporters Friday (June 20) at the National Development Planning Ministry office in South Jakarta, as reported by CNN Indonesia.
The funds will also support the Self-Help Housing Stimulus Assistance (BSPS) program, known locally as bedah rumah. Uniquely, the World Bank-backed version of BSPS will emphasize structures that can enhance family welfare—such as small homestays or micro shops.
Plans are also underway to incentivize the construction of vertical housing, including low-rise apartments and transit-oriented developments (TOD).
“We’re preparing incentives for developers interested in building affordable low-rise apartments or subsidized housing,” Fitrah added.
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The ministry has submitted the preliminary proposal to the National Development Planning Agency (Bappenas) for review before forwarding it to the World Bank for further assessment.
“If all goes well, implementation could begin as early as 2026,” Fitrah said.
Earlier this week, Housing Minister Maruarar Sirait confirmed the World Bank’s loan offer of roughly $1.5 billion, intended to support President Prabowo Subianto’s national target of building 3 million homes. The loan carries an interest rate of 6–7 percent.
“We’re studying how to align this offer with our own housing goals. Of course, we must thoroughly evaluate which programs are best supported through the World Bank’s funding,” Maruarar said Thursday (June 19), as reported by Antara News.
The initiative underscores Indonesia’s commitment to tackling its housing deficit while aligning urban development with social welfare and sustainability goals, marking a significant step toward inclusive and livable cities nationwide.
(Raidi/Agung)
