Sri Mulyani Explains The Application Of ESG Saving APBN In Building Infrastructure

Minister of Finance Sri Mulyani Indrawati at the Joint Finance and Health Ministers' Meeting (JFHMM) Launching of ESG framework and manual in Badung, Bali. (photo: dock. between)

JAKARTA - Finance Minister Sri Mulyani Indrawati stated that the implementation of an environmental, social, and environmental, social and governance (ESG)-based framework in building infrastructure projects would save the use of the State Revenue and Expenditure Budget (APBN). By implementing the ESG, it is a global standard practice that prioritizes the aspects of sustainability both from an environmentally friendly side, benefiting socially and having very good governance. Sri Mulyani explained that the ESG principle follows the standard practice of marriage, social, and governance including investing and building infrastructure. She said that if an infrastructure project is built with ESG principles then both from the quality side the project to its finances will be environmentally friendly, not detrimental to the community and well managed. Therefore, if in building an infrastructure project using ESG principle then it will automatically fulfill a reputation standard so that it is easier to attract investors. In this case, PT Indonesia Infrastructure Finance (IFF), the Ministry of PUPR and all projects financed with the Government Cooperation and Business Entity (KPBU) scheme have received reputation because of the ESG principle, then this project will be able to attract a lot of financing more easily. He will be able to attract a lot of funding more easily because investors will no longer need to ask about the quality of the project,'' he said, quoted by Antara. Meanwhile, if a project can attract more financing, especially from the private party, then the role of state finance or APBN will be reduced. Sri Mulyani also encourages the reputation building of projects in Indonesia from the governance side, social and environment through the ESG principle so that it will improve the profile of Indonesia and its own projects.

"So he will attract more investors. Not only abroad but also domestically, from the financing side, "he said. Director General of Infrastructure Financing of the Ministry of PUPR Herry Trisaputra Zuna added, currently there are three projects being carried out with the KPBU scheme and applying the ESG principle. The three government projects that will be pilot projects include Merangin Jambi Dam and public housing or public housing in Cisaranten and Karawang, West Java. "Three of them are just preliminary. Later we will apply the KPBU projects initiated at PUPR, be it drinking water, water resources, toll roads and housing," said Herry.