Germany plans €2.5bn loan to Indonesian green infrastructure projects

Out-Law News | 15 Mar 2021 | 6:37 am |

Germany has agreed to lend €2.5 billion ($2.9bn) to fund green infrastructure projects in Indonesia's urban areas to reduce carbon emissions.

The fund will be distributed over five years through a partnership between Germany and German National bank (KfW) under an Indonesian-German Infrastructure scheme, according to a report.

The scheme aims to reduce carbon emissions in Indonesian cities.

The cooperation between the two countries will be achieved through technology transfer and a campaign to promote public awareness.

Indonesia will provide management programmes in hygiene, clean water supply, and to make public transportation systems more effective and environment friendly.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “Decarbonisation and reducing emissions in rapidly growing nations such as Indonesia will require not just investment into low or no emission projects, but also investment into energy efficiency, particularly using technological solutions. Germany is well placed to support Indonesia’s plans to reduce its emissions through deploying its know-how and capital. This arrangement between the two nations should therefore be a win-win-win, for Indonesia, Germany and the environment. A clear and robust policy and regulatory framework will however have to be put in place for such technology transfers and investments to take place.”

Indonesia’s government in 2017 announced its plan to reduce marine waste by 70% by 2025.