Using Compensation Mechanism for Watershed Protection Services in Citarum

This PDA will help develop a compensation mechanism to protect the Citarum watershed.


The Citarum river provides drinking water, hydropower, irrigation water, municipal water supply, and aquaculture opportunities to Jakarta and other urban centers in West Java. But these multiple users do not “pay” the watershed for the services it provides. Collected water tax is not earmarked, and the effects of deforestation and catchment area degradation are becoming very evident with the increasing cases of flooding, land slide, siltation, and other forms of disasters resulting from deteriorating watersheds.

This PDA will help develop and demonstrate the use of a compensation mechanism for watershed protection services in Citarum. One of its expected outcomes is the formulation of a policy on payment for environmental services. Recommendations to emerge from this PDA will be considered in the on-going preparation of ADB’s Integrated Citarum Water Resources Management Project.

Expected Outcomes

  • Developed compensation mechanism for watershed protection services at Citarum river basin area
  • Disseminated publication on compensation for watershed services