Jakarta, 3 August 2026 - Across Indonesia, communities, local governments, waste workers, and recycling businesses are already driving efforts to improve waste management. From community waste banks and TPS3R facilities to recycling enterprises and municipal services, many of the foundations for a more circular economy are already in place. Yet, one challenge emerged consistently: while many promising initiatives exist, they often struggle to access the financing needed to sustain and expand their impact. 

To better understand this challenge, UNDP Indonesia, through the Plastics Circularity Project supported by The Coca-Cola Foundation (TCCF), conducted the “Financing Landscape Assessment for Inclusive Waste Management System in Indonesia”. The assessment examines financing needs across Indonesia's waste management sector, maps existing funding sources, and identifies opportunities to better align public, private, philanthropic, and development financing. 

To validate the preliminary findings, UNDP convened a focus group discussion in collaboration with the Directorate of Waste Reduction and Circular Economy Development of the Ministry of Environment. The discussion brought together representatives from the Ministry of National Development Planning (Bappenas), the Environmental Fund Management Agency (BPDLH), the Ministry of Religious Affairs, PT Sarana Multi Infrastruktur (PT SMI), environmental agencies from Greater Jakarta (Jakarta, Bekasi, Depok, Tangerang, and South Tangerang), the Asian Development Bank (ADB), the Embassy of Denmark, BAZNAS, Yayasan KEHATI, PT Pegadaian, Coca-Cola Europacific Partners Indonesia (CCEP), development partners, philanthropic organizations, academia, and industry representatives. 

Opening the discussion, Agus Rusly, Director of Waste Reduction and Circular Economy Development at the Ministry of Environment, emphasized the need to position waste management as a strategic investment that delivers environmental, economic, and social benefits. 

"We need to see waste management as a strategic investment. Waste management entities should be managed professionally as business entities," he said. "At the same time, we want those we currently refer to as informal waste actors to become part of this ecosystem. They should also receive greater protection and support in carrying out their work." 

The assessment estimates that Indonesia requires between IDR 63-125 trillion annually to establish and maintain an effective waste management system. Current financing is estimated at IDR 23–30 trillion, leaving an annual financing gap of approximately IDR 33–102 trillion. The Ministry of Environment also highlighted the need to accelerate the achievement of Indonesia's national waste management target by 2027 through stronger collaboration and better use of available financing sources, including waste service fees. 

Participants agreed that the challenge is not only the amount of financing available, but also how it is allocated. While local governments continue to invest heavily in waste collection, transportation, and landfill operations, upstream interventions—including waste reduction, source segregation, recycling, and community-based waste management—remain underfunded. Strengthening support for waste banks, TPS3R facilities, recycling enterprises, and informal waste workers was identified as essential to improving resource recovery while creating local livelihoods. 

The discussion also highlighted opportunities to better utilize a wide range of financing sources, including national and local government budgets, village funds, Extended Producer Responsibility (EPR), private investment, corporate social responsibility (CSR), environmental, social and governance (ESG) financing, philanthropy, zakat and waqf, and blended finance. Participants agreed that better coordination across these financing instruments would help address different investment needs throughout the waste management value chain. 

Reflecting on the challenges faced by local governments, Marlena Widiawati of Bekasi City's Environmental Agency highlighted the importance of collaboration. 

"We cannot solve the waste problem by ourselves," she said. "We need collaboration, including support from CSR programmes, ministries, and development partners, so that waste management solutions can continue to grow." 

The discussion also identified several policy priorities to strengthen the financing ecosystem, including improving waste service fee collection, implementing the Ministry of Home Affairs Regulation No. 7 of 2021, developing Regional Waste Management Master Plans (RIPS), expanding Regional Public Service Agencies (BLUD) for waste management, and exploring practical approaches to implementing the polluter pays principle. 

“This forum is about more than identifying financing needs,” said Jatu Arum Sari, National Project Manager of the UNDP Plastics Circularity Project. “Across Indonesia, we have seen many local solutions already working. Our challenge now is to ensure that financing can better support these efforts so they can continue to grow. Through the Plastics Circularity Project, UNDP is proud to work alongside the Government of Indonesia and our partners in helping connect financing with the people and initiatives driving change on the ground.” 

The discussion will inform the finalization of the Financing Landscape Assessment for Inclusive Waste Management System in Indonesia, which is expected to provide practical recommendations for improving financing arrangements and strengthening investment in Indonesia's waste management sector.

Supported by The Coca-Cola Foundation, the UNDP Plastics Circularity Project works with government, communities, development partners, academia, and the private sector to advance inclusive waste management and Indonesia's transition towards a circular economy. The project combines evidence, partnerships, and practical solutions to help create a financing environment where locally driven initiatives can grow and deliver lasting environmental, social, and economic benefits. 

Writer: Jatu Arum Sari and Anastasia Weningtias

Editor: Nabilla Rahmani