Sustainable finance: instruments and management to achieve sustainable development in Indonesia

PT Sarana Multi Infrastruktur (Persero) (PT SMI) and PT Indonesia Infrastructure Finance (IIF), under the coordination of the Ministry of Finance of the Republic of Indonesia, collaborated in holding a business forum event with the theme “Sustainable finance: instruments and management to achieve sustainable development in Indonesia«.

The event took place at the Sofitel Bali Nusa Dua Beach Resort on July 13 and was part of a series of Road to G20 activities in Indonesia. This business forum related to sustainable finance is one of the six priority agendas in the 2022 Indonesian G20 presidential financial roadmap. This event is expected to provide broader information on policy directions, goals and expert experiences on implementing sustainable financial instruments.

The Finance Minister of the Republic of Indonesia, Sri Mulyani Indrawati, gave the keynote speech and becomes the keynote speaker at the business forum event. In his comments, Sri Mulyani said: “Previously, the climate change discussion was only attended and dominated by environmentalists and institutions or at the environment ministry level, where the financial sector was never included in the discussion agenda. However, since Bali (UNFCCC 13, 2007), we have initiated and put the financial aspect in the context of discussions and conversations, including at the stage of negotiations related to climate change”.

Malaysia underlined the importance of localizing sustainable development goals

PT SMI President and Director Edwin Syahruzad stated: “As an institution mandated by the Ministry of Finance, PT SMI supports the government’s role in reducing emissions, starting at the national level, and will in turn contribute to efforts sets for global sustainability. Such support includes the creation of sustainable financial products through the mobilization of financial support from multilateral or capital market instruments, such as green bonds, as well as the SDG Indonesia One (SIO) platform. In this blended financing platform, we have managed to obtain commitments of USD 3.3 billion from donors, philanthropists and bilateral and multilateral financial institutions, to be channeled towards environmental projects, such as the renewable energy sector.”

PT IIF President and Director Reynaldi Hermansjah also stated: “Fulfilling its mandate as a catalyst for accelerating sustainable infrastructure development in Indonesia, IIF has a responsibility to promote the IIF 8 Social and Environmental Principles (adopted from international standards) . Through this business forum, we hope to increase a deeper understanding of the concept of sustainable development, including its implementation in infrastructure development in Indonesia.”

Previously, the discussion on climate change was dominated by environmentalists, while the financial sector was not part of it. Today, the financial aspect is part of the context of discussions and negotiations

This activity also invites experts and policymakers. Speakers at the discussion session included Enrico Hariantoro, Head of the Integrated Financial Services Sector Policy Group of the Indonesian Financial Services Authority; Masyita Crystallin, Special Advisor to the Finance Minister of the Republic of Indonesia on Macroeconomic and Fiscal Policy; Jiro Tominaga, country director for Indonesia of the Asian Development Bank; Zalina Shamsudi, Head of the International Program for Asia and the Pacific of the Climate Bonds Initiative; Pradana Murti, director of PT SMI; and Wito Tantra, director of PT IIF.

The discussion session was led by Andini Effendi, moderator of the event. The session discussed the government’s role in supporting sustainable development through a policy framework, and the government’s efforts to allocate a budget to deal with the impacts of climate change in Indonesia. In addition, how the support of partners and alternative financing was collected to finance sustainable development in Indonesia was also discussed.