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A catalyst for green financing in Indonesia
Globally the green bond market is estimated to reach as much as US$250 billion in 2018.
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A girl enjoys a horse ride at the East Flood Canal in Jakarta on Sunday. Jakarta’s green space currently covers an estimated 4.6 percent of the total area of Jakarta, a far cry from the targeted 30 percent. (JP/Wendra Ajistyatama)
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t is an unfortunate but fact of life that Indonesia often deals with the impacts of natural disasters. It was sadly evident again this week when I arrived in Jakarta to the unfolding disaster caused by the earthquake in Lombok, West Nusa Tenggara. My condolences go out to the families and friends of those who lost their lives.
While scientists are reluctant to say a specific natural disaster is caused by climate change, they say a changing climate is resulting in more extreme events around the world. That’s why at International Finance Corporation (IFC), the largest global organization working with the private sector in emerging markets, finding new avenues for climate financing is a key priority.
Green bonds offer a pathway. The world is witnessing a rapid growth in green bonds, dramatically increasing the flow of capital to green projects and bringing new financiers into the climate-smart investment space.
Virtually unknown a decade ago, green bonds have now emerged as a real force in generating private sector financing for projects in renewable energy, energy efficient and other eco-friendly industries. Globally the green bond market is estimated to reach as much as US$250 billion in 2018. While there’s growing interest from investors, few Asian banks and institutions outside of China have issued green bonds. But clearly momentum is building in the region.
