Empowering change: Financing Indonesia’s green and blue economy

Accelerating Indonesia’s transition to a net zero economy will hinge on the country’s ability to decarbonise power production and fully phase out fossil fuels. However, the recent geopolitical fallout and rising inflation pose major hurdles to funding the just energy transition, as retreating international funds and higher costs challenge domestic economic development.  

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Indonesia is especially vulnerable to shortfalls in finance, with over 90 per cent of the country’s climate finance needs – including the energy transition – sourced externally from multilateral, private and commercial funds. Nonetheless, domestic capital and international investments provide the country continued opportunities to lead on the energy transition.  

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Domestically, Indonesia can tap into a robust ecosystem of green bonds, sovereign wealth funds and institutional investors to finance the transition. Meanwhile, blended finance models are de-risking investments in developing economies, helping to attract public, philanthropic and private capital to plug in funding deficits.  

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This plenary discussion will explore strategies to mobilise domestic and international finance, from green bonds to taxonomies, as well as the role of policy and regulation to de-risk these investments for better impact and returns.

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With planetary deadlines looming near and social inequalities on the rise, countries are increasingly exploring the sustainable use of ocean resources to spur economic growth and improve livelihoods, while simultaneously tackling the worsening climate crisis. This blue economy forms a salient component of Indonesia’s national strategy.

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As the world’s second largest fishery, Indonesia’s marine industry is pivotal to supporting local livelihoods and the national economy, while boasting enormous climate mitigation potential with mangrove ecosystems sequestering carbon four times faster than tropical forests. Conversely, the domestic fisheries sector loses up to US$4 billion annually due to illegal fishing and unsustainable practices.  

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Indonesia has made significant strides in tapping into this potential while addressing ongoing challenges, from launching the first-of-its-kind blue bond to finance the sustainable use of marine ecosystems to developing a Blue Economy Index. However, climate change, overfishing and conflicting stakeholder needs continue to hinder the sustainable development of the country’s blue economy.

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This plenary discussion will explore the innovative financial and technological solutions necessary to ensure the long-term and sustainable use of Indonesia’s ocean resources to unlock economic growth, protect livelihoods and decarbonise the domestic economy.

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Countries across Asia and the globe are increasingly exploring the use of artificial intelligence (AI) to fast-track sustainable development. AI is lauded for its ability to optimise data and improve decision-making while improving financial inclusion for marginalised communities through democratised, mobile platforms.

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With a domestic market value of approximately US$1.8 billion, Indonesia is spearheading the responsible use of AI within the financial system through its Indonesian Payment System Blueprint. However, the challenge will be directing this finance to impactful sustainability solutions on-the-ground.

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Tech startups are key to driving groundbreaking solutions to the climate and sustainability challenges disproportionately affecting underserved groups in the country. However, these startups often lack the finance, resources and market access to scale and accelerate these solutions.

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This plenary discussion will explore AI’s potential both as a tool to mobilise sustainability solutions and unlock critical finance, while determining the regulatory framework needed to support adoption and protect against AI’s inherent risks – from high data consumption to the loss of human intelligence.

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