T

he 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 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].”

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.”