Indonesia's SDGs Financing Gap Reaches 1 Trillion US Dollars

President Joko Widodo with the Minister of National Development Planning/Head of Bappenas Suharso Monoarfa while reviewing "Integrated Digital Work" at the Bappenas Building. (Photo: Antara)

JAKARTA - The financing gap for sustainable development goals (SDGs) in Indonesia is estimated at 1 trillion US dollars.

This was stated by the Expert Staff of the Minister of National Development Planning/Bappenas for Social Affairs and Poverty Reduction Vivi Yulaswati in the G20 side event webinar, Monday 23 May.

"Before COVID-19, the global annual financing gap for the SDGs had reached US$2.5 trillion. But the figure widened to US$4.2 trillion due to the pandemic," Vivi said as quoted by Antara, Monday.

Vivi said, to close this gap, countries in the world have been making mixed financing that combines investment from the government and the private sector in a number of SDGs programs.

However, with the widening of the financing gap, a number of adjustments to mixed financing need to be made.

"Several adjustments known as Mixed Financing 2.0 need to be considered to attract commercial financing, establish a common framework for mixed financing, and effective action for mixed financing," he said.

According to the Convergence Report 2021, Asia has emerged as an increasingly important mixed-capital destination.

In 2020, Asia accounted for around 36 percent of mixed financing-related transactions, which were mainly conducted in Vietnam, Myanmar and Indonesia.

The Indonesian government itself has carried out an economic transformation to build sustainable financing with the SDGs as the main framework.

"We have created a sustainable ecosystem by producing a sustainable finance roadmap, green taxonomy, mapping SDGs investors, Indonesia Impact Fund, and mainstreaming SDGs in corporate investment and government policies," he said.

Indonesia is currently finalizing a roadmap for the integrated national financing framework and aligning the implementation of the SDGs with international standards.