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Indonesia ‘lucrative’ for climatefriendly investments

Rachmadea Aisyah
The Jakarta Post
Sat, December 1 2018
The International Finance Corporation (IFC) of the World Bank Group has estimated
that Indonesia’s most populous cities can raise tens of billions of dollars from
investments related to combating climate change.
The IFC, through its latest report titled Climate Investment Opportunities in Cities,
said Indonesia’s capital of Jakarta had the potential to lure almost US$30 billion
worth of climate-friendly investment opportunities until 2030.
Sandra Pranoto, IFC Indonesia lead for green buildings, said the investments could
be directed toward various facilities, especially the development of green buildings,
which had been estimated to garner US$16 billion in investments.
Jakarta kick-started the regulatory scheme for climate-friendly living when it issued
five years ago Gubernatorial Regulation 38/2013 on green buildings, she said.
“After that, the Public Works and Housing Ministry followed suit with Ministerial
Regulation 22/2015, which establishes a national umbrella regulation in
Indonesia,†Sandra told a press conference over the weekend.
Jakarta is one of the six cities the IFC observed in its report. Besides Jakarta, there
are Nairobi in Kenya, Mexico City in Mexico, Amman in Jordan, Rajkot in India and
Belgrade in Serbia.
Two more Indonesian cities have followed Jakarta’s lead, said Sandra. The
second city was Bandung in West Java, which issued in 2016 a similar regulation and
even improved it by adding articles for residential landed housing.
Currently, Semarang in Central Java is slated to become the third city to implement
green building regulations, she said, adding that the city administration had been
working with IFC experts to draw up the regulations.
In addition to green buildings, there are several other sectors in Jakarta that could
benefit from climate-friendly investments according to the report, such as electric
vehicles, which could draw up to $7 billion in funds, urban water at $3 billion,
renewable energy at $3 billion, waste management at $725 million and public
transport at $660 million.
Currently, 339 commercial buildings in Jakarta with a combined size of 21 million
square meters have adopted green building principles. In Bandung, 3,001
http://www.thejakartapost.com/news/2018/12/01/indonesia-lucrative-climate-friendly-investments.html 1
commercial and residential buildings have also adopted them.
By 2030, with the fulfillment of investment potential and regulatory enforcement,
Jakarta’s energy and water usage as well as its carbon dioxide content will each
be reduced by 30 percent.
Furthermore, 60 percent of the existing buildings would have adopted the green
building regulations by that year, said Sandra.
She pointed out that the Financial Services Authority had been actively supporting
the climate-friendly investment through the issuance of two regulations pertaining to
sustainable financing and green bonds in 2017.
Speaking on the same occasion, IFC Indonesia senior country officer Jack Sidik called
on stakeholders to increase awareness of the importance of climate-friendly
development, especially in urban areas threatened by rising sea level because of
climate change, such as in Jakarta.
“The rate of urbanization in Indonesia will reach 68 percent by 2025, so this
threat of climate change is very real to us,†said Jack. “This is providing
opportunities for investors who want to combat the impacts of climate change
[commercially].â€
Undersecretary to the Jakarta governor on spatial planning and the environment
Oswar Mungkasa echoed Jack’s statement, saying the government should not
rely on corporate social responsibility (CSR) funds to overcome climate change.
“We usually look forward to CSR incentives for green development like this when
the development is actually giving way to business potential,†said Oswar.
He added that the Jakarta administration had been attempting to gather ideas on
green building design so that all stakeholders would be able to reach a common
vision.
“There are a lot of experts and champions of green development in Jakarta, but
they do not gather in one place,†he said. “Therefore, we have formed a forum
that holds monthly meetings for them to share their visions.â€
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