Indonesia to use green investment fund for driving its renewable program
Indonesia is hoping to raise hundreds of millions of dollars from foreign governments to fund "green infrastructure" projects through a Green Investment Fund.
Reported locally, “Indonesia is hoping to raise hundreds of millions of dollars from foreign governments to fund “green infrastructure” projects, a finance ministry official said Wednesday.
The “Green Investment Fund” would finance an ambitious development programme designed to simultaneously boost economic growth while reducing emissions blamed for climate change, senior investment official Langgeng Subur said.
Letters promoting the fund had been sent to several embassies in Jakarta, and Britain had already expressed its willingness to participate, he said.
“So far, the UK has replied saying it’s ready to assist. It has also stated an amount but at this point I won’t reveal how much,” he told AFP.
Expressions of interest also had come from countries including Australia, France, Japan and the United States, he added.
“It’s still in the early stages but we plan to launch it this year,” Subur said.
“The fund will help to drive infrastructure developments to reduce greenhouse gas emissions. Indonesia is committed to fulfilling our target of cutting emissions by 26 percent by 2020.”
Edward Gustely, a foreign adviser to the finance ministry, said the goal was to raise a billion dollars with an initial deposit of 100 million dollars from the Indonesian government.
“What we want to do is to scale greater investment in green infrastructure and market deployment of clean technology to address immediate and future needs of climate change,” he said.
“Our goal is to launch it within this year but we don’t know how fast we can do this.”
Projects eligible for the funds would be things like new geothermal or hydro power stations, bio-waste technologies and water distribution projects — which might struggle to raise capital through market channels, he said.
Indonesia is one of the world’s largest greenhouse gas emitters, thanks mainly to massive deforestation for the timber trade and to make way for palm oil plantations.
Greenpeace awarded Indonesian President Susilo Bambang Yudhoyono the “World Cup of Forest Destruction” on Tuesday as the real football Jules Rimet Trophy passed through Jakarta.
Environmentalists say the government has done almost nothing to stop deforestation — much of it illegal and linked to corrupt officials — which would go a long way to achieving its emissions targets.
A report by Human Rights Watch last month said corruption in the Indonesian forestry sector cost the government two billion dollars a year and supported a lucrative black market in timber products.
The US-based watchdog said graft would undermine Indonesia’s ability to attract foreign finance for greenhouse mitigation schemes like reduced deforestation.
But Gustely said the Indonesian government was strongly committed to “seriously address the effects of climate change and… reduce its current emissions”.
Countries which invested in the proposed fund would measure returns on the basis of “verification of greenhouse gas reductions”, he added.”