Financing schemes to promote sustainable future in Indonesia

In an effort to promote sustainability, GBPN recently held a national dissemination workshop, attended by over 120 participants. The workshop marked the completion of Phase 1 of a joint project involving the Fiscal Policy Agency (FPA) of the Ministry of Finance (MOF), Monash University, and Global Buildings Performance Network.

Gerry Pramudya, senior data analyst at MOF, took the lead in sharing best practices as well as recommended options for incentives and financing mechanisms to encourage investments in sustainable buildings. By helping to address the cost barriers, this collaborative effort aims to promote the development of green buildings that will advance the country towards its lower carbon emissions goal.

“Our joint study identified several viable options for incentives and financing schemes to promote investments in green buildings. These options include offering soft loans for the use of renewable energy technologies, financial and non financial incentives for green building projects including offices and residentials, tax deductions, ease of building approval, and carbon credits opportunities.” Mr. Pramudya said.

“Essentially, these recommendations are options that can be considered for adoption and implementation to help promote a better enabling environment and improve the ease to invest in sustainable buildings nationwide.”

Speakers presenting national and sub-national insights all highlighted the importance of cohesive regulations and technical guides for successful implementation of financing recommendations. Key speakers included Ida Bagus Setiawan, Head of the Energy Department of Bali Province, Sulton Sahara standing in for the Director of Settlement and Housing Engineering from the Ministry of Public Works and Housing, and Bintang Agus Nugroho, from Association of Indonesian Green Building Experts (IABHI).

Opportunties of Implementation from Pilot Cities

GBPN expert, Dr Poppy Ismalina, is optimistic that this will foster confidence in sustainable financing initiatives.

“We believe that testing out implementation of the recommended options can be done in the Province of Bali who has declared its commitment to achieve net zero emissions by 2045.” Dr Ismalina said.

“We plan to identify which options will be most viable for implementation by assessing the readiness of selected city or regency within the province, such as the existence of supporting policy and regulatory framework to support the implementation of the identified options.”

Dr Poppy Ismalina pointed out that collaborations with stakeholders, financial institutions and government plays an important role in this opportunity.

“We will continue to engage various stakeholders in the consultation process as well as encourage banks and non-banks to participate in financing green buildings practices and the use of renewable energy technology that is an inseparable component of green buildings.”

This effort to improve the financing aspect of green buildings will certainly complement GBPN’s previous efforts which led to the creation of technical guidelines for green building construction to support the implementation of the Bali Clean Energy Governor Regulation.

“Hopefully in the near future Bali Province can become a demonstration model for other sub-national level governments for promoting the development of green buildings and can support the national efforts to achieve the country’s net zero emission goal by 2060 through decarbonization of the building sector.”

This National Dissemination event received positive responses from participants ranging from academicians, practitioners, financial institutions, sub-national governments and other key national government agencies. With the conclusion of Phase 1 of this joint collaboration, the project is set to move to Phase 2 by preparing the on-the-ground implementation of the recommended options to promote growth of green buildings in the Bali Province.