STRONGER BUMDesa AS A KEY TO SUPPORT VILLAGE SUSTAINABLE DEVELOPMENT
A robust institutional framework is crucial for fostering a better social environment, as it provides the necessary structures and mechanisms for sustainable living. Effective institutions are fundamental for managing diverse sectors, which in turn contributes to improvements in quality of life with increased reliability. Institutions are indispensable across all societal levels—from international organizations to local communities—where they serve to organize and oversee specific sectors or activities. Institutionalization ensures that operations adhere to established laws and procedures, thereby promoting safe and responsible practices within each sector.
Recognizing the critical roles of strong institutions in society development, the ACCESS Project designated the establishment of strong institutions in target villages as one of the three main goals over its four-year duration. ACCESS Project closely connects with Village Owned Enterprise called “BUMDes” (Badan Usaha Milik Desa) as the main institution in the village. BUMDes is an institution that focuses on business interests by managing business model tailored to the village's target market and specific needs. It also acts as an institution to leverage the village economy through improving public services and optimizing village assets. Apart from that, BUMDes have a role as supporting the business and economic activities of village communities through facilitating productive village economic activities. BUMDes plays very important roles in village development to leverage the village economy.
The ACCESS Project has successfully established BUMDes in 22 villages across Indonesia. It specifically facilitated the creation of BUMDes in several villages that previously lacked such institutions. In villages where BUMDes already existed, ACCESS provided targeted training to enhance the financial administration skills of their administrators. Alongside efforts in solar panel installation and village electrification, the project introduced a new component within BUMDes: the Village Electricity Management Unit (UPLD). The UPLD is responsible for overseeing the solar panel infrastructure, including the management of all associated components and the coordination of local operators. These local operators are crucial for the operation, socialization, and maintenance of the solar panels. Additionally, the UPLD manages the collection of electricity fees from households, Micro, Small, and Medium Enterprises (MSMEs).
In addition to establishing and training BUMDes to manage solar panels, the ACCESS Project implemented a seed funding program to develop their business units. This initiative aligns with the opportunities created by solar panel electrification, enabling BUMDes to explore new business ventures. ACCESS Project provided 20 BUMDes with funds to leverage electricity for new business opportunities. For instance, in Tasipi Village, BUMDes Laut Biru Tasipi initiated an ice cube business, addressing the local demand from fishermen. Before this project, ice cubes were scarce and costly. ACCESS Project contributed Rp 20,000,000 in seed funding, complemented by Rp 6,500,000 from the village’s capital participation, totaling Rp 26,500,000 for purchasing freezer boxes and refrigerators. The business, which began in March, now sells 40-70 ice cubes daily at Rp 2,000 each. Although profits are not yet substantial, the business is promising, with some demand from outside the village. The BUMDes operates with a 15,000-watt KHW meter, ensuring stable electricity usage, which supports efficient ice production and business growth.
By providing establishment, training, and seed funding, ACCESS Project has developed a stronger BUMDes in the target villages. ACCESS Project has advanced the status of all 20 BUMDes, from “perintis” (pioneer) to “pemula” (beginner). This status measured across seven criteria from institutional, management, business unit, partnership, assets and capital, administration, reporting and accountability, and benefits for village and community. Stronger BUMDes as village institution will bring a lot of benefits for the village, especially in remote areas. These efforts align with the Sustainable Development Goals (SDGs) by promoting sustainable village development.