Giant Sea Wall Is Considered To Need To Be Supported By Mixed Financing

JAKARTA - University of Sebelas Maret (UNS) researcher Anto Prabowo assesses that the Giant Sea Wall (GSW) project needs to be supported by a blended finance solution.

The project is estimated to require funds of US$40-42 billion for development in Jakarta. This figure, he said, could not fully rely on the state budget which also bears other priority programs.

"The solutions are blended finance, combining public, private, and global investors through innovative financial instruments," Anto said, quoting Antara.

According to him, GSW will be a global climate adaptation model that combines physical asset protection, socio-economic transformation, ecological conservation, and financing innovation if successful.

The potential economic value is estimated at 20-25 billion US dollars for the value of new properties in the reclamation area in 20 years, new business centers and industries that attract direct foreign investment (FDI).

This project is also projected to absorb hundreds of thousands of workers in the construction, service and tourism sectors. In addition, the economic efficiency of reducing flood losses is US$600 million per year.

'GSW not only prevents losses, but creates new economic value. This is the logic of asset protection and asset value creation that must go hand in hand,' he added.

He added that this multidimensional project could work with collaborative governance.

Financial innovations such as Green Sukuk, Asset Value Protection, and ABS make this project bankable as well as inclusive.

Social-ecological safeguards also need to be considered to ensure fair development.

"If these three things are maintained, GSW will be a milestone in Indonesia's history in responding to the triple challenge of climate policy, namely effectiveness, efficiency, and justice," he said.