Jakarta (VNA) – Indonesia is stepping up efforts to diversify its climate financing instruments as it seeks to mobilise about 800 trillion IDR (nearly 50 billion USD) a year to achieve its net-zero emissions target by 2060, according to a senior finance official.
Acting Director General of Financial Sector Stability and Development at Indonesia's Ministry of Finance Herman Saheruddin said the country is building a comprehensive climate finance ecosystem involving both the public and private sectors while expanding cooperation with international financial institutions to support its green transition.
Herman said the government is promoting a broad range of financing instruments in addition to state and regional budgets. These include Green Sukuk, SDG Bonds, Blue Bonds, carbon markets, blended finance and partnership funds with multilateral development banks and bilateral partners.
He stressed that the state budget should serve as a catalyst rather than the primary source of climate finance, helping reduce investment risks, boost investor confidence and attract greater private-sector participation.
Between 2018 and 2024, Indonesia spent an average of 73.5 trillion IDR (around 4.5 billion USD) each year on climate-related programmes, equivalent to about 3% of total state budget expenditure.
While the figure demonstrates the government's commitment to tackling climate change, it remains well below the country's annual investment needs, according to data from Indonesia's National Development Planning Agency (Bappenas).
To close the financing gap, the government is encouraging stronger participation from banks, capital markets, carbon markets, philanthropic organisations, corporations and international financial institutions.
A diversified and collaborative financing ecosystem is essential to support Indonesia's energy transition, green infrastructure development and efforts to strengthen resilience against climate change./.
