INDEF Calls Funding For Climate Change Alleviation Blocked By The COVID-19 Pandemic

JAKARTA - Senior Economist at the Institute for Development of Economics and Finance (INDEF) Aviliani assessed that the COVID-19 pandemic was a barrier to the distribution of funding for climate change alleviation.

"So we want to lead to a policy of eradicating climate change but the government wants to resolve the crisis first, this is a dilemma," said Aviliani in an Indef webinar monitored in Jakarta, Tuesday, April 19. Another challenge, the Indonesian government is currently still issuing debt securities. which are not specific for funding environmentally friendly projects, so they are less attractive to investors. "This must be anticipated so that investors enter us, otherwise they will move investment to other countries that are already paying attention to environmental issues," he said, as reported by Antara. However, he acknowledged that the issuance of bonds in local currencies such as the rupiah has the potential to not sell in the global market. While issued in foreign currencies such as dollars, issuance of debt securities creates exposure to exchange rate risk, so it needs to be done carefully.

Regarding environmentally friendly funding from banks, Aviliani said that currently it has not been widely implemented because banks are still looking for business actors who meet the requirements and deserve funding. expensive. "Unclear green and non-green categories to be funded is also still a challenge. From a financial perspective, it may have to be connected," he said.

According to him, not only OJK and the Ministry of Environment and Forestry, other ministries and institutions need to also determine which business categories are environmentally friendly or not.