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RI banks uncertain about green financing, investment
Green financing has become one of the most discussed topics in Indonesia, yet financial institutions in the country remain hesitant.
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Illustration of green financing
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G
reen financing has become one of the most discussed topics in Indonesia, yet the country’s financial institutions appear reluctant to engage.
Boby Wahyu Hernawan from the Finance Ministry’s Fiscal Policy Agency said that despite growing awareness of green financing in Indonesia, some financial institutions did not view such investments as lucrative business opportunities.
Speaking at the launch of the Green Investment Principles’ (GIP) Southeast Asia chapter in Jakarta, Boby explained that the financing gap for climate solutions in Southeast Asia was estimated at US$1.8 trillion, emphasizing the need for cooperation at the national, subnational, regional and international levels.
The event was hosted by the Centre for Strategic and International Studies (CSIS) and other organizations at the Indonesia Auditorium Jakarta on Thursday.
Read also: Show me the money': RI frustrated with green financing deadlock
"There are bottlenecks and a lack of economic incentives. Financial institutions, crucial actors in this mobilization, often do not consider green credit lines to be attractive business opportunities," said Boby, who heads the Center for Climate Change and Multilateral Financing Policy at the ministry’s Fiscal Policy Agency.
He added that the absence of clear economic benefits associated with green credit could deter active participation in sustainable finance initiatives.
