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PPT Ahmad Rifqi -OECD Stakeholder Dialogue on Mobilising Clean Energy Finance and Investment, 8 November 2019


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Presentation from Ahmad Rifqi - OJK
OECD Stakeholder dialogue: Mobilising Clean Energy Finance and Investment
Joint OECD-Government of Indonesia (GoI) Workshop at the Indo EBTKE Conex 2019, 8 November, Jakarta

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PPT Ahmad Rifqi -OECD Stakeholder Dialogue on Mobilising Clean Energy Finance and Investment, 8 November 2019

  1. 1. Ahmad Rifqi International Department SUSTAINABLE FINANCE Implementation
  2. 2. SUSTAINABLE FINANCE NEEDS SUSTAINABLE FINANCE Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.“ (Brundtland Report, Our Common Future, 1987) Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change. ... Such mobilization of climate finance should represent a progression beyond previous efforts. (UNFCCC) Sustainable finance in Indonesia is defined as comprehensive support from the financial service industry to achieve sustainable development resulted from a harmonious relationship between economic, social and environmental interests (SF Roadmap 2015- 2019) No one left behind (increase private involvement)
  3. 3. INDONESIA SUSTAINABLE FINANCE JOURNEY 2012 2013 2015 2014 2016 2017 2018 2019 OJK a founding member and joining SBN OJK Developing Roadmap OJK Issued SF Roadmap 2015-2019 OJK 1. Awareness Programs 2. Green lending models 1. OJK SF Award 2. First Movers Sustainable Banking 3. GoI ratified Paris Agreement on Climate Change 4. BCSF established 1. OJK SF Umbrella Regulation, 2. OJK Green Bond guidelines 3. GoI adopt SDGs initiative 1. 1st Green Bond/Sukuk issued by Government and Financial Institution 2. OJK SF guidelines for Banking 3. ISFI established 4. Introduction blended finance scheme 1. 1st SF action plan by banks 2. OJK SF Monitoring 3. OJK Developing Roadmap Phase II 2020- 2024 4. OJK SF research programs 5. Blended Finance 6. Sustainable Finance Initiatives 2015-2018 implementation of OJK SF Roadmap2015-2018 implementation of OJK SF Roadmap 50 batches training program for 1000 SF officers50 batches training program for 1000 SF officers 8 banks as first movers8 banks as first movers 2 banks, 1 NBFIs issued green bonds about USD 669 M2 banks, 1 NBFIs issued green bonds about USD 669 M USD 2,4 B blended finance commitment for SDGsUSD 2,4 B blended finance commitment for SDGs How could we close the funding gap, mobilize the capital, and increase investors’ participation?
  4. 4. OJK’S ENDEAVOUR TOWARDS SUSTAINABLE FINANCE • 80% commercial banks has submitted Sustainable Finance Action Plans. • Increasing portfolio to finance sustainability projects: green buildings, ecotourism, renewable energy, organic farming, and sustainable infrastructure. • Green insurance • Encourage leasing and finance companies to provide financing for organic farmers, fishermen, and MSMEs. • Set up microfinance institutions (with Islamic boarding schools all over Indonesia) that provide loans to environment- friendly businessess. • Listed companies shall submit action plans on the implementation of sustainable finance principles by end of this year, followed by securities companies in 2 years. • Regulations that support the issuance of sustanability bonds and green sukuk. ISFI is a forum for cooperation among financial institutions in the field of sustainable finance. The existence of ISFI is increasingly complementing the ecosystem of sustainable finance in Indonesia. The program of sustainable finance on Banks, Capital Market and Non Bank Financial Institutions BANKS Capital Market NBFI
  5. 5. BANKING CAPITAL MARKET NON BANK FINANCIAL INSTITUTIONS  Sustainability Bond  Green Loan/Financing: syndicated loan or innovational financing that uses Green Climate Fund such as green building, ecotourism, renewable energy, efficiency energy, organic farming, sustainable infrastructure.  IPO (sustainability bond, green bond/sukuk, etc)  Equity Crowdfunding  Pension Fund: Sustainability bond – pension fund, green investment.  Financing Institution: financing to environt- friendly MSMEs.  Microfinance: financing for organic farmers.  Insurance: insurance for fishermen/farmers, climate risk insurance, etc. SUSTAINABLE FINANCE PRODUCTS
  6. 6. 169mio USD G r e e n b o n d s INDONESIA’S GREEN FINANCE COMPOSITION Assist in mitigating early-entrant costs or project risks and helping re-balance risk-reward profiles for pioneering investments GREEN LOANS US$9,45 billion or IDR132,7 trillion GREEN BONDS US$ 669 million or IDR9,5 trillion GREEN SUKUK US$3,2 billion or IDR45 trillion • PT. Sarana Multi Infrastruktur (PT SMI) for amount US$35 milion or IDR500 billion in 2018 • OCBC NISP for amount US$ 134 million or IDR2 trillion in 2018 • PT. BRI for amount US$500 million or IDR7 trillion in 2019 Global Green Bonds US$ 180 Billion
  7. 7. BLENDED FINANCE An Attractive Source of Financing for Indonesia’s Infrastructure Development USD 2.46 Billion 33 Green Projects 9 PROJECTS IN PROGRESS (2019)6 PROJECTS HAVE BEEN DONE IN 2018 16projects are being prepared/drafted. 1. SDG Indonesia One. Blended finance platform by PT SMI. 2. Green Climate Funds. Blended finance platform by BKF Kemenkeu (for amount USD 10,3 Billion). 3. Global Environment Facilities. Blended finance platform by KLHK (focusing on sustainable land use, for amount USD 4,1 Billion). 4. Utility Scale Solar PV Plants for amount USD 160 Million. 5. Gringgo, saving marine program from plastic waste. 6. Proyek Pembangunan Tsinghua Southeast Asia Center corporated with Tsinghua University Tiongkok and UID. 7. Anti Stunting Program, for amount USD 10 M from Asian Philanthropists, CSR company FeelWell Ceramics. 8. Sustainable Finance roadmap update (OJK). 9. Tri Hita Karana Roadmap for Blended Finance. 1. Cargill, CPO companies are committed on USD 6-10M loan disbursement for ecosystem restoration, conservation and community forest projects. 2. Geothermal Energy Upstream Development Project, by PT SMI with USD 65 M grants from World Bank, co financing PT SMI USD 49 M, 5 years revolving. 3. Jambi Micro Hydro Power Project, cooperated with UNDP, Baznas, Bank Jambi (CSR funds) for amount Rp.8,56 Billion. 4. Starbucks Greener Nusantara. Starbucks is committed for not using plastics. 5. Tri Hita Karana for Clean Bali. Traditional power structure and laws to change behaviour and reduce marine littering. 6. Billion Dollar Fund for Women Campaign. Investing in women across all sectors from food to financial services. 1. Proyek National Multifunction Satellite for Telecommunication. For amount USD 583.3 M. 2. Belantara Ecotourism Project in South Sumatera. 2 PROJECTS WILL BE STARTED IN 2019
  8. 8. SUSTAINABLE FINANCE ACCELERATION STRATEGY OJK is committed to establishing an effective regulatory environment to encourage the development of sustainable financing for the achievement of the SDGs. Independent assessor that are qualified to assess green projects. Strategic national policies and leadership role. Adequate level of literacy –on the part of investors, issuers and regulators— on issues related to environment and the Sustainable Development Goals, including particular issues such as green financing schemes. Availability of experts in the sustainable development and sustainable finance. Clear global standards in green financing. Scaled-up coordination efforts among Government agencies, domestic and international organizations as well as private sector.
  9. 9. Sustainable Finance Website (021) 2960 0000 (021) 385 8321 OJK Contact 157 THANK YOU