Luky Alfirman, the Finance Ministry’s financing and risk management director general, said on Friday the ministry would create an online-based retail government debt papers (SBN) marketing platform in the second quarter of this year.

The SBN sold online would also have a lower minimum subscription from the current Rp 5 million (US$350) for their non-online counterparts, he said.

“We want to attract more retail investors, so maybe the minimum subscription will be Rp 1 million, or Rp 500,000 or even Rp 100,000. We are still working on it,” he said during the launching of the SR-010 series retail sukuk at the Indonesia Stock Exchange (IDX) building on Friday.

He said the ministry had been conducting a pilot project for the program since last November, involving banks, securities companies and fintech firms as sellers.

Finance Ministry director of government securities Loto Srinaita Ginting previously said the pilot project involved six lenders, namely Bank Mandiri, Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), Permata Bank and the Development Bank of Singapore (DBS).

The ministry also appointed one securities company, Trimegah Sekuritas, and two fintech firms, namely Bareksa and Investree.

The fintech involvement is a new move as previously retail sukuk and bonds were only sold by banks and securities companies, while investors had to fill subscription forms manually through the help of sales agents.

As part of its efforts to seek more financing for the state budget, Luky said the government planned to issue around Rp 30 trillion worth of retail debt papers this year.

The first offering was the SR-010 series retail sukuk issued on Friday, effective from Feb. 23 to March 16, followed by online-based retail bonds and sukuk in the second quarter, as well as retail government bonds (ORI) in the third or fourth quarter.

“We have yet to set a target; it will depend on market demand,” Luky said, declining to mention the exact value the government expected to gain.

Other than the online-based debt paper selling, Luky said the government would issue global green bonds and sukuk this year. It had reached a deal with investors to issue $3 billion in securities, consisting of five-year green sukuk and 10-year green bonds worth $1.25 billion and $1.75 billion, respectively.

“We are still in the settlement phase, and offerings still come and go, but now it is almost 2.5 times oversubscribed,” he said.

He said the green bond and sukuk had underpinnings of government-owned assets and sustainable development projects. After 10 years, the government had to create reports regarding the project implementation and compliance to the sustainability principles.

“The report will be examined by independent auditors,” Luky said.

Indonesia is not the first country to issue green bonds, as Poland had done it in 2016, but Southeast Asia’s largest economy is the pioneer in green sukuk issuance.

Finance Ministry Islamic financing director Suminto said green bonds and sukuk issuances were part of government efforts to attract more potential investors, especially those who were committed to environmental preservation.

“Ordinary investors will still buy green bonds and sukuk, but now the green investors can also buy our debt papers. The green bond and sukuk are increasing our investor base,” he said.

Suminto said the number of green funds and portfolio managers committed to environmental protection had been increasing lately, particularly in developed countries.

“There are portfolio managers offering dedicated funds for green investments and those which do not yet have those kinds of things but are committed to supporting [the protection of] the environment,” he said.

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