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Challenges remain as Indonesia gains ground in green development
A December 2019 report by the IFC shows that Indonesia has made strides in green development and relevant regulations, but the Green Building Council Indonesia (GBCI) cautions that demand is needed to drive further progress in the sector.
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Fluid design: The South Quarter multi-purpose complex in Lebak Bulus, South Jakarta, is one of dozens of buildings in Indonesia that have been certified as a green development by the Green Building Council Indonesia (GBCI). (Courtesy of intiland.com/-)
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reen development in Indonesia presently covers 25 million square meters, or about 5.7 times the area of Vatican City, thanks to significant progress made by Jakarta and Bandung in pioneering green building codes, says a recently released report, but challenges await further progress.
Published early this month, the report from the International Finance Corporation (IFC), the World Bank Group's financing arm, shows that Indonesia has made significant advancements in green development through various governmental efforts.
The report cites figures from the IFC's June 2018 survey, which found 339 buildings covering 21 million sqm in Jakarta that complied with the green building code, and more than 3,000 buildings covering 880,000 sqm in Bandung that complied with the code.
“There is a strong business case for the private sector, financiers and governments to invest in green buildings [...] which will play a significant role in helping the country meet its climate targets,” Azam Khan, the IFC Country Manager for Indonesia, Malaysia and Timor Leste, stated in a press release.
With total coverage of 25 million sqm, green development in Indonesia potentially reduced CO2 emissions by more than 1 million metric tons, equivalent to not driving 216,000 passenger cars for one year.
At the same time, green buildings have saved up to 1.5 million megawatt hours in energy use, which has helped residents and businesses save over US$120 million (Rp 1.68 trillion) in energy bills.
Banking on the potential benefits from the sector, Bank Indonesia recently announced a 5 percent increase in the maximum loan-to-value ratio for green development to 90 percent, thereby lowering the down payment that have to be paid by borroweres.
