...but also for (building) their (the investors’) reputation and leadership in supporting the sustainable agenda.
Jakarta (ANTARA) - Bank Indonesia (BI) is encouraging investors to expand sustainable investments to regions outside Java Island, especially in Sumatra Island, to reduce regional growth disparities.

"Supported by improved infrastructure, increased government spending and incentives, regions outside Java can outperform (regions in Java Island) in investment and economic growth," Deputy Governor of BI Dody Budi Waluyo remarked at the Lampung Investment Business Collaboration Forum on Tuesday.

Sumatra Island is a potential investment location since it has a lot of natural resources, such as oil, silver, and gold, he added. The region is also a major producer of tea, coffee, rice, and corn, and accounts for about a quarter of the country's gross domestic product (GDP).


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Thus, the central bank believes that the policy framework and implementation of sustainable investment need to be strengthened since the success of shifting to a more sustainable global economy is highly dependent on sustainable funding.

"Hence, all attempts to strengthen sustainable investment need to be carried out together quickly," the deputy governor said.

Furthermore, he emphasized that it is very important to invest in projects that support the implementation of the sustainable development goals (SDGs).

"(The investment in SDG projects is) not only (useful for supporting) climate risk mitigation policies, but also for (building) their (the investors’) reputation and leadership in supporting the sustainable agenda," he said.


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Meanwhile, Bank Indonesia has devised three strategies to increase sustainable financing in Indonesia.

The first involves developing green financial and investment instruments to bolster sustainable and inclusive economic growth while absorbing more workforce and supporting the Paris Agreement.

“Second, it is important to develop a sustainable financial instrument ecosystem. It can be realized with the support of all stakeholders by implementing incentive and disincentive policies as well as building resilience infrastructure," Waluyo said.

The ecosystem includes green taxonomy, verification services, green certification, green certification bodies, and green rating agencies.

The third strategy is implementing capacity-building programs and providing technical assistance to increase the understanding and expertise of all stakeholders involved in the ecosystem.

Bank Indonesia is supporting the implementation of green transformation through various macroprudential policies, such as lowering the down payments for electric vehicles and providing special loans for the development of green property.


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Translator: Kuntum Riswan, Uyu Liman
Editor: Fardah Assegaf
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