Green Sukuk Contributes To National Economy Development

Photo: Doc. Antara

JAKARTA - The government continues to support green projects that contribute to climate change mitigation and adaptation programs, as well as Sustainable Development Goals (SDGs). One of them is through Green Sukuk as a funding instrument for these projects.

Director of Sharia Financing, Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance Dwi Irianti explained that Green Sukuk was issued as an investment instrument to fund projects that are beneficial to the environment.

In addition, Dwi added that this sharia securities was mainly used for infrastructure financing for sustainable development.

"Indonesia has issued Green Sukuk since 2018 and is the first in the world. Sukuk Negara can be used to build the nation's economy and create people's welfare," said Dwi Irianti in her statement, Thursday, December 7.

Dwi continued, Green Sukuk would only fund the project on condition that it did not conflict with sharia principles. It can be said that this is a form of environmentally friendly funding innovation.

"Green sukuk must also be channeled to projects that are in accordance with the green framework prepared by the government," he explained.

In Indonesia, there are five sectors financed through Green Sukuk, including sustainable transportation, renewable energy, waste management for energy and others, sustainable agriculture, and climate change resilience for areas that are very vulnerable to this phenomenon.

Dwi said there were several examples of green projects financed from the results of the issuance of Green Sukuk, including the Piyungan waste processing project in Yogyakarta, the solar panel project in the Selayar Islands, South Sulawesi, the Taluda Beach Protection Project, Bone Bolango, Gorontalo, and the Light Rail Transit Project, Palembang, South Sumatra.

Since 2018, the government has succeeded in issuing Green Sukuk in the global market with a total of 6 billion US dollars.

Meanwhile, in the domestic market, the government has also issued the world's first retail Green Sukuk in November 2019 and sold it online to individual investors, with total issuance until 2023 reaching IDR 25.2 trillion.

"In addition, the government has also issued Green Sukuk through an auction with the PBSG001 series since 2022 with a total up to now reaching Rp20.4 trillion," said Dwi.

Even so, according to Dwi, currently there are still many challenges in the issuance of thematic financing such as Green Sukuk. One of them is the lack of public awareness of new and innovative financial products like this.

"For this reason, the issuance of green sukuk requires a clear framework or framework. It also needs strong coordination between ministries and institutions, and competitive incentives so that more people are interested," he explained.

Therefore, Dwi said that his party is now continuing to encourage education to the public about this green funding instrument. Especially to provide an understanding that Green Sukuk is an effective tool in encouraging sustainable investment and helping to achieve sustainable development goals in Indonesia.

"Hopefully the community can contribute to fighting climate change. People have a sense of shared ownership and responsibility for the environment and green projects," he concluded.