The Government of Indonesia, through the Ministry of Finance, and the Government of Germany, through the German Development Bank KfW, signed on Monday, 30 June 2025 a loan agreement of EUR 230 million for the “Surabaya Regional Railway Line (SRRL) Phase 1”. In addition, a grant agreement of EUR 6 million was signed to support the integration of the different modes of transport as well as the sustainability of the investment. SRRL Phase 1 is an ambitious green infrastructure project aimed at transforming urban mobility in the Greater Surabaya area (Gerbangkertosusila). The project is a key initiative and supports the national development priorities for 2025–2029.

SRRL Phase 1 encompasses double tracking and electrification of the 20 km Gubeng–Sidoarjo corridor. With a total investment of EUR 296.8 million—comprising EUR 230 million in concessional loans from KfW, EUR 66.8 million in counterpart funding from the Government of Indonesia, and EUR 6 million in grants—the project is expected to serve over 200,000 daily commuters once operational.

Aligned with the President’s Asta Cita/ Prioritas Nasional (PN), the SRRL project directly supports PN2 (Green Economy Transformation), PN3 (Sustainable Infrastructure Development), and PN6 (Strengthening Urban Areas as Centers of Economic Growth). It is projected to reduce greenhouse gas emissions by up to 150,000 tonnes annually by 2045. The project also promotes inclusive development through improved urban accessibility, job creation, and institutional capacity-building via international knowledge transfer.

Beyond its environmental contributions, SRRL delivers tangible social and economic benefits, including reduced traffic congestion, lower logistics costs, and enhanced commuter safety. Future expansions will integrate the system with additional railway and bus services and implement Transit-Oriented Development (TOD)—a planning approach that promotes compact, walkable communities cantered around high-quality public transport. These enhancements will position SRRL as the backbone of East Java’s modern transport network.

“The Surabaya Regional Railway Line (SRRL) Phase 1 is an ambitious project that will significantly improve urban mobility in the Greater Surabaya area,” said Mr. Thomas Graf, Chargé d’affaires ad interim, German Embassy to Indonesia. “Germany is proud to support the SRRL with EUR 236 million in loans and grants. This project is a key investment in sustainable infrastructure, directly supporting Indonesia’s national development priorities and contributing to a greener economy. We are confident the SRRL will also boost economic growth, reduce greenhouse gas emissions and benefit over a million residents.”

SRRL Phase 1 is expected to benefit more than 1.3 million residents within its first two years of operation, supporting Indonesia’s goal of 8% economic growth while advancing a cleaner, more efficient, and connected urban future.