Bank Indonesia Governor Perry Warjiyo (Photo:MI/Panca Syurkani)
Bank Indonesia Governor Perry Warjiyo (Photo:MI/Panca Syurkani)

BI Highlights 3 Initiatives for Sustainable Infrastructure Financing

English macroeconomics (en) indonesian economy (en)
Wahyu Dwi Anggoro • 08 Mei 2019 19:00
Jakarta: The Governor of Bank Indonesia, Perry Warjiyo, has highlighted three important initiatives oriented towards equitable and sustainable infrastructure financing in Indonesia.
 
The BI Governor outlined the initiatives at a High-Level Meeting in Paris on 7th May 2019.
 
First, Indonesia has consistently implemented structural reforms, including institutional, fiscal and regulatory reforms, in addition to prioritising prudent macroeconomic policy management, which are crucial for infrastructure development.

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Second, Indonesia has strengthened coordination between the relevant authorities to stimulate private sector infrastructure financing.
 
"Innovative financing schemes have been developed and are contributing to finance infrastructure development in Indonesia, including public-private partnerships (PPP), project bonds, infrastructure funds, asset and earning backed securities as well as blended finance," the central bank said in a press statement released on Wednesday.
 
Third, Indonesia has accelerated development of social and environmental infrastructure in support of the 2030 Sustainable Development Goals (SDGs).
 
"After successfully launching the SDG One Blended Finance roadmap at the IMF-World Bank Annual Meetings held in Bali, Indonesia also released the first Green Sukuk at the beginning of this year. This represents Indonesia’s tangible and avowed commitment to social and environmental infrastructure development," the central bank noted.
 
The central bank governors and finance ministers from advanced and developing economies in attendance agreed to strengthen sustainable financing in order to nurture sustainable economic growth.
 
The agreement came in response to the challenge of the infrastructure financing gap, particularly efforts to overcome debt vulnerability, while maintaining debt sustainability amidst high demand for economic development, infrastructure development in particular, which is actively being promoted.
 
A World Bank study revealed that infrastructure development financing in low and middle-income countries is required at 2-8% per year to support achievement of the 2030 Sustainable Development Goals (SDGs).
 
The High-Level Meeting in Paris, as part of the 2019 G20 meetings in Japan, was also attended by various international organisations, including the World Bank, International Monetary Fund (IMF), Bank for International Settlements (BIS), Organisation for Economic Co-operation and Development (OECD) and Asian Development Bank (ADB).
 
The international community of financial institutions also agreed to prioritise the public investment sector and strengthen coordination to bolster domestic capacity in terms of preparing for infrastructure projects.
 

(WAH)
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