Tens Of Trillions Already Released, Government Aims For Premium Coupons From Green Sukuk Issuance

Deputy Minister of Finance Suahasil Nazara (Photo: screenshot of the Indonesian Institute of Accountants Youtube)

JAKARTA - The government through the Deputy Minister of Finance (Wamenkeu) Suahasil Nazara targets the issuance of green sukuk financing instruments, both global and retail, to immediately get a separate appreciation from investors.

"Our green sukuk have not yet received premium coupons, we are still selling green at the same level as conventional ones," he said when he was a speaker at the IAI Sustainability Roundtable Discussion related to Climate Change on Tuesday, November 16.

According to the Deputy Minister of Finance, RI is strongly committed to realizing sustainable development from financing with environmental principles.

“We have always said that Indonesia has extraordinary ambitions in green activities. If the international community will help Indonesia and should help Indonesia, then the way to do that is by providing the green sukuk that we issue as a premium and incentive," he said.

The representative from Sri Mulyani assessed that if this could be realized, the issuance of green financing instruments could also encourage private corporations to issue the same instrument. This means that more and more benefits will be received to continue to be able to realize sustainable development with good environmental insight.

"We want green incentives not only to be received by the government but also corporates that go green can also receive incentives. But remember, periodic reports are needed regarding the use of funds to investors on a regular basis," he said.

For information, Indonesia is the first country in the world to issue a green sukuk financing instrument, namely sharia debt securities with a combination of environmental principles. Since it was first released in 2018, this instrument has managed to absorb investor funds of up to tens of trillions of rupiah.

There are two types of instruments that have been released by the government. First, global green sukuk with a value of IDR 3.5 billion US dollars or equivalent to IDR 49.7 trillion (exchange rate of IDR 14,202). Second, retail green sukuk with a domestic market share of Rp6.88 trillion.