JAKARTADAILY.ID – The Asian Development Bank (ADB) has approved a $150 million loan to support a facility aimed at accelerating Indonesia’s economic recovery from the pandemic and catalyzing public and private funds to support bankable and green infrastructure projects to help the country reach the United Nations' Sustainable Development Goals.
The Sustainable Development Goals Indonesia One–Green Finance Facility (SIO-GFF), the first of its kind in Southeast Asia, aims to finance at least 10 projects, with at least 70 percent of the financing supporting green infrastructure and the rest supporting the SDGs.
The facility will design bankable projects to attract funding to supplement public expenditure, including from private, institutional, and commercial sources.
"The SIO-GFF aims to catalyze up to 8 times the funds invested to support climate-friendly infrastructure and help Indonesia make progress toward the SDGs," said Unit Head of ADB’s Green and Innovative Finance for Southeast Asia and Country Director for Thailand Anouj Mehta.
"It will boost the development of sustainable infrastructure and accelerate the country’s recovery from the COVID-19 pandemic by crowding in capital and creating jobs."
The loan to the Indonesian government will be re-lent to PT Sarana Multi Infrastruktur (Persero), or PT SMI, a state-owned infrastructure financing institution, which will administer the facility. ADB also approved technical assistance to help strengthen PT SMI’s ability to implement the facility and eventually broaden the firm’s services to support other borrowers and catalyze private funding.
The technical assistance is funded with $1.2 million from Australia’s Department of Foreign Affairs and Trade and $375,000 from Luxembourg’s Financial Sector Development Partnership Special Fund.
"Indonesia is the world’s fifth-largest emitter of greenhouse gas emissions and accounts for more than half of GHG emissions in Southeast Asia," said ADB Senior Financial Sector Specialist Benita Ainabe.