JAKARTA: State-owned infrastructure financier PT Sarana Multi Infrastruktur (PT SMI) has signed two grant agreements and two memorandums of understanding (MoUs) with international development partners.
The developments are aimed at securing new funding to deepen Indonesia’s sustainable finance market and accelerate the country’s energy transition.
The agreements were signed during the Donor Coordination Meeting in Jakarta on Feb 4, bringing together and bilateral development agencies to support blended finance schemes under PT SMI’s SDG Indonesia One (SIO) platform and the Energy Transition Mechanism (ETM).
One of the commitments came from Germany’s KfW Development Bank, which agreed to provide grant funding of up to €7.82mil (US$9.3mil) to establish a Green Bond Development Facility aimed at accelerating the issuance of green and sustainability bonds in Indonesia.
The facility is expected to strengthen environmental, social and governance (ESG) standards among bond issuers while mobilising greater private capital into climate-aligned investments.
PT SMI also signed an extension of a grant agreement with France’s Agence Francaise de Developpement to optimise the use of remaining grant funds for project preparation, particularly in green and inclusive infrastructure development.
At the same event, the state-owned firm entered into MoUs with the Global Green Growth Institute (GGGI) and the Japan International Cooperation Agency (JICA) to expand cooperation on energy transition financing, project development, waste management and sustainable infrastructure.
Under the MoU with JICA, the collaboration will focus on supporting Indonesia’s transition away from fossil fuels, including project development under the ETM platform, which is designed to blend public and private capital to retire coal-fired power plants and accelerate clean energy investment.
Meanwhile, cooperation with GGGI will centre on promoting green economic growth, including policy support and project pipelines aimed at scaling up sustainable investment.
PT SMI president director Reynaldi Hermansjah said coordinated partnerships with development agencies were crucial to mobilising financing for Indonesia’s climate and development agenda.
“Effective coordination and partnership with development partners are essential to accelerating sustainable infrastructure development and advancing a just and inclusive transition.
“By leveraging collective expertise and resources, we aim to support Indonesia’s climate goals while ensuring that the transition toward a greener economy remains inclusive and equitable,” Reynaldi said in a statement. — The Jakarta Post/ANN
