Indonesia is the fourth most populous country in the world and one of the fastest growing emerging markets. It aims to deliver USD400bn worth of new public-works projects in the transportation, energy, water and waste sectors over five years.
Many of these will also be critical to meetings its Paris Agreement targets. The state budget will cover 63% of this investment but the remainder must come from development partners and capital markets.
Green bonds from Indonesian issuers could suit both of these requirements making green bonds a key tool to accessing international and private sector capital. There are, however, some barriers to market growth – some specific to Indonesia and others relevant to emerging economies around the world.
Unlocking green bonds in Indonesia- A guide for issuers, regulators and investors provides practical information on overcome some of the main hurdles to international green bond issuance. The solutions explored, while supportive to issuers, are applicable to a much wider range of stakeholders – particularly government and multilateral stakeholders.
At this early stage of the market, issuers will require external support to catalyse the market.
follows on from the Climate Bond Initiative’s other Indonesia publications - the inaugral Green Infrastructure Investment Opportunities (GIIO) Indonesia report, released in 2018, and the GIIO Indonesia Update Report 2019 released in early December.
These reports provide investors, issuers and policy-makers with a pipeline of green infrastructure investments in Indonesia as well as specific case studies of green projects and their potential green finance mechanisms.