Financing schemes to promote sustainable future in Indonesia

Overview

In an effort to promote sustainability, GBPN recently held a national dissemination workshop, attended by over 120 participants. The workshop marked the completion of Phase 1 of a joint project involving the Fiscal Policy Agency (FPA) of the Ministry of Finance (MOF), Monash University, and Global Buildings Performance Network.

Gerry Pramudya, senior data analyst at MOF, led sharing best practices and recommended options for incentives and financing mechanisms to encourage investments in sustainable buildings, aiming to promote green buildings and the country’s lower carbon emissions goal.

“Our joint study identified several viable options for incentives and financing schemes to promote investments in green buildings, including soft loans for renewable energy technologies, incentives for green building projects, tax deductions, ease of building approval, and carbon credits opportunities.”

“Essentially, these recommendations are options for adoption and implementation to help promote a better enabling environment and ease of investment in sustainable buildings nationwide.”

Opportunities for Implementation from Pilot Cities

GBPN expert, Dr Poppy Ismalina, is optimistic that this will foster confidence in sustainable financing initiatives.

“We believe testing the implementation of the recommended options can be done in Bali Province, which has declared its commitment to net zero emissions by 2045.”

“We plan to identify which options will be most viable by assessing the readiness of selected city or regency within the province, such as the existence of supporting policy and regulatory framework to support the identified options.”

Dr Poppy Ismalina noted that collaborations with stakeholders, financial institutions and government play an important role in this opportunity.

“We will continue to engage various stakeholders in the consultation process and encourage banks and non-banks to participate in financing green buildings practices and the use of renewable energy technology as an essential component of green buildings.”

This effort to improve the financing aspect of green buildings will complement GBPN’s technical guidelines for green building construction to support the Bali Clean Energy Governor Regulation.

“Hopefully in the near future Bali Province can become a demonstration model for other sub-national governments for promoting the development of green buildings and can support national efforts to achieve net zero emissions by 2060 through decarbonization of the building sector.”

This national dissemination event received positive responses from participants including academicians, practitioners, financial institutions, sub-national governments and other key national government agencies. With Phase 1 concluded, the project moves to Phase 2 to prepare on-the-ground implementation of the recommended options to promote growth of green buildings in Bali Province.

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