KWS, the Project Company, is 70% owned by the Korea Water Resources Corporation (“K-Water”) and 30% by PT Adhi Karya (“Adhi”) (together, the “Sponsors”). K-Water is the governmental agency of the Republic of Korea assigned for the development and management of water resources projects; K-Water is the largest water supply provider in South Korea, producing 30% of the national water; it supplied around 4.1 trillion litre of tap water in a year in 2020. Adhi is an Indonesian state-owned enterprise (“SOE”) conglomerate with a strong engineering, procurement, and construction (“EPC”) business.                                                   

The total Project cost is estimated at US$200 million. The proposed IFC investments consist of (i) an IFC A Loan of up to US$60 million or Indonesian Rupiah (IDR) equivalent on IFC’s own account; (ii) an IFC B Loan of up to US$20 million on the account of B Loan participants; (iii) a loan in the amount of up to US$15 million from IFC in its capacity as implementing entity of the Finland-IFC Blended Finance for Climate Program; and (iv) an USD:IDR cross-currency swap with the Loan Equivalent Exposure of up to US$10 million. Total IFC’s own account investments exposure will not exceed 35% of the total project cost.                                                   

The water treatment plant (“WTP”) site is a greenfield site located in Jelupang subdistrict, South Tangerang City, adjacent to Kunciran Serpong Toll Road. The treated water transmission pipeline will stretch from the Karian WTP in South Tangerang City to four offtake points in West Jakarta, Tangerang City, and South Tangerang City.                                                   

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability (2012), as it is expected to have adverse E&S risks and/or impacts that are limited in scale, few, generally site-specific and readily addressed through mitigation measures by adhering to good international industry practice (GIIP). Key E&S aspects include KWS’ E&S management systems and capacity; temporary economic displacement of a small numbers of people; occupational health and safety (OHS); labor and working conditions, including contractors and sub-contractors; emergency preparedness and response; discharge of wastewater and management of sludge; flood hazards; community health and safety; stakeholder engagement; and community grievance redress.