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JAKARTA: The Indonesian government is developing a range of fiscal and financial instruments linked to climate change such as green bonds and sukuk, according to Finance Minister Sri Mulyani Indrawati.

The minister emphasised today that US$5 billion in global sukuk green bonds and 21.8 trillion rupiah (US$1.4 billion) in domestic green sukuk have been issued since 2018 to reduce emissions.

“These financial instruments played a pivotal role in the reduction of emissions, witnessing a decline from 5.7 million tonnes of carbon dioxide (CO2) in 2018 to 222,647 tonnes in 2022,” she said at the World Bank dialogue on Climate Change and Indonesia’s Future, here.

Indonesia has also engaged in integrated financing partnerships that enhance infrastructure development, aligning with its sustainable development goals to establish concrete financing plans.

“We will persist in collaboration and keep our doors open because a climate agenda without financing will remain merely an agenda, a distant dream,” Sri Mulyani stressed.

To-date, the country has secured financial backing from multiple countries, and the Green Climate Fund (GCF) set up within the framework of the United Nations Framework Convention on Climate Change.

Based on GCF Financial Instrument data, it has allocated US$486 million to Indonesia, comprising 23 per cent in equity, 26 per cent in loans, and 35 per cent in grants, she added.–Bernama