12-1-2024 (JAKARTA) In a significant move towards advancing sustainable development in Indonesia, Germany has pledged €262.82 million (approximately Rp4.48 trillion). The funds will be directed towards initiatives aimed at enhancing public transportation and fostering a sustainable financial market ecosystem.
Of the total commitment, Germany will provide €250 million (approximately Rp4.26 trillion) as a subsidized loan, with an additional €5 million (Rp85 billion) granted specifically for the development of an environmentally friendly Bus Rapid Transit (BRT) system in Surabaya. This announcement was made by the German embassy in Jakarta through a statement released on Thursday.
The primary objective of the BRT project is to alleviate traffic congestion, boost the usage of public transportation, and mitigate greenhouse gas emissions stemming from private vehicles. The German development bank, KfW, is set to offer financing and technical expertise throughout the project.
Notably, the initiative aligns with the Green Infrastructure Initiative (GII), a bilateral cooperation program between Indonesia and Germany. The GII aims to support Indonesia’s endeavors in reducing greenhouse gas emissions, with a focus on promoting environmentally friendly urban infrastructure.
In addition to the support for public transportation, Germany will allocate a grant of €7.28 million (Rp124 billion) to bolster the growth of the green bond market in Indonesia. This grant will be instrumental in enhancing the capabilities of green bond issuers and the Indonesian government, according to the embassy’s statement.
The project is poised to mobilize additional funding for Indonesia’s ambitious climate agenda, particularly in the realm of energy transition. It will operate through the Just Energy Transition Partnership (JETP) financing mechanism, a collaboration involving Indonesia, Germany, and other members of the International Partners Group (IPG).
The partnership between Indonesia and Germany in development cooperation dates back to 1958, encompassing various areas of sustainable development. Presently, the collaboration concentrates on energy and sustainable urban development, encompassing public transport, forest management, and conservation.
Describing this collaboration as a shared commitment to a more sustainable future, the statement emphasized the potential of international cooperation in safeguarding global interests. This financial commitment from Germany underscores a collective dedication to fostering positive change and sustainable growth in Indonesia.
