Project overview

EcoShape and Wetlands International's Building with Nature Indonesia initiative shows how nature-based coastal infrastructure can protect communities while restoring ecosystems and supporting local livelihoods. The initiative focuses on Demak, Central Java, where coastal erosion, mangrove loss, unsustainable infrastructure and groundwater extraction have contributed to land loss, flooding and declining incomes. Wetlands International reports that 30 million people are exposed to coastal flooding and erosion hazards in Northern Java, affecting 3,000 villages, and that the five-year programme from 2015 to 2020 sought to enhance coastal security for 70,000 vulnerable people in Demak.

The approach combines mangrove restoration, small-scale hard engineering and sustainable land use. Rather than relying only on conventional sea walls, the project uses natural ecological processes to rebuild stable coastlines. It aims to reduce erosion risk, support mangrove regeneration and give coastal communities a long-term perspective for sustainable economic development. The case is relevant for ACT Ocean because it demonstrates how infrastructure, finance, ecosystem restoration and community incentives can be integrated into one coastal resilience model.

Approach

Building with Nature is a comprehensive engineering approach that uses interactions and materials present in nature to deliver more flexible and sustainable hydraulic infrastructure. In Demak, the technical measures include permeable dams made from brushwood that slow waves, capture sediment and help restore a healthy sediment balance. Once nearshore bed levels rise sufficiently, mangroves can regenerate naturally, creating a living coastal defence that protects the hinterland against flooding and further erosion.

The model also addresses the socio-economic drivers of coastal degradation. The project introduced sustainable aquaculture practices that create space for mangrove restoration, including by giving up unproductive coastal ponds or parts of riverine ponds to mangroves. In return, shrimp farmers receive training in sustainable techniques designed to improve production and resilience. These measures are supported through community bylaws, community development plans and government master planning.

A distinctive feature is the use of a bio-rights financing mechanism linking community finance to conservation outcomes. Local households can receive small loans to develop sustainable aquaculture and other income-generating activities; once restoration targets are achieved, the loans convert into grants. This creates performance-based incentives for community participation while linking ecological recovery with livelihood security. The model has also been embedded in the work plan of the Indonesian Ministry of Marine Affairs and Fisheries and, according to the case materials, has been replicated in the Philippines, Viet Nam and Sri Lanka. Through pilots, capacity building, knowledge exchange and policy integration, EcoShape and Wetlands International have used the Demak experience to support broader uptake of blue nature-based infrastructure across Asia.

Business and economic value

The business and economic value of the model lies in reframing coastal protection as an investable, multi-benefit infrastructure solution. The source materials state that Building with Nature can deliver long-term coastal protection at lower cost than conventional sea walls, while also supporting mangrove regeneration, fisheries productivity, carbon storage, biodiversity and local economic development. For communities facing income losses linked to erosion and aquaculture degradation, the combination of restoration and sustainable aquaculture provides a route to greater self-reliance and hazard resilience.

The case also illustrates the enabling finance needed to mainstream blue nature-based infrastructure. Development and philanthropic capital helped de-risk early community engagement and pilot hybrid structures. Structured finance can support long-term maintenance and monitoring funds, which are often absent from public budgets but are essential for project durability. At the direct finance level, the case materials point to opportunities to integrate hybrid coastal protection into procurement pipelines and public-private partnerships, helping mobilize capital for resilience-linked outcomes.

For ACT Ocean, EcoShape and Wetlands International's work offers a practical example of how infrastructure investment can strengthen both ecosystems and local economies. It shows that combining engineered structures, natural regeneration, community finance and policy integration can create coastal resilience benefits that are ecological, social and economic. It also highlights that, despite the promise of nature-based infrastructure, barriers remain in turning these models into scalable investment opportunities capable of attracting larger private finance flows.

References

1. Building with Nature Indonesia - Wetlands International

2. Turning the Tide: A Financier's Guide to Investing in Blue Carbon Ecosystems - World Economic Forum