Joint Press Release: OJK and Environment and Forestry Ministry Launch Roadmap to Sustainable Finance and Guidance Book for Clean Energy

08 December 2014
Financial Services Authority, Jakarta, December 5, 2014: Financial Services Authority (OJK) and Environment and Forestry Ministry launched Roadmap to Sustainable Finance, which contains exposition about work plan for sustainable finance for financial services industry under OJK`s supervision, namely banking, capital market and non-bank financial industry. The launching event was attended by Environment and Forestry Minister Siti Nurbaya and Chairman of OJK Board of Commissioners Muliaman D. Hadad.
The launching of Roadmap to Sustainable Finance was a part of implementation of memorandum of understanding (MoU) between OJK and Environment Ministry (now Environment and Forestry Ministry) signed previously on May 26, 2014.
The Roadmap to Sustainable Finance is intended to elaborate targeted conditions relating to sustainable finance in Indonesia for middle-term period (2015-2019) and long-term period (2015-2024) for financial services industry under OJK`s supervision, and also to create a pillar of betterment for sustainable finance. The roadmap will become a reference for OJK, financial services practitioners and other parties having interests in supporting sustainable finance, mainly government, industry players and international institutions.
Environment and Forestry Ministry Siti Nurbaya in her speech said that the role of sustainable finance is expected to become one of the leveraging instruments for finding solutions to problems in national and global environment management and at the same boosting competitiveness of national bank and non-bank financial services.
The Roadmap to Sustainable Finance will be a part of master plan in Indonesia`s financial services sector and be used as a reference for other stakeholders in sustainable finance.
Meanwhile, Chairman of OJK Board of Commissioners Muliaman D. Hadad said that the sustainable finance program is not only intended to increase financing but also to improve resilience and competitiveness of financial services institutions. The development and improvement of resilience and competitiveness are based on the idea that sustainable finance is a new challenge as well as an opportunity in which financial services institutions may gain benefits of growing and developing more stably.
Some of the matters to be implemented in relation to the Roadmap to Sustainable Finance are, among others:
In the field of policy for principle and definition of sustainable finance, will make policies/regulations starting in 2015-2016, which will function as the umbrella for sustainable finance policies and guidance for supervision over sustainable finance implementation.
In the field of policy for sustainable finance portions, will make policies/regulations starting in 2015-2016 to drive financial services institutions to dispense environment-friendly financing. For instance, by increasing the portion for environment-friendly financing with the incentive of permit to decrease the portion for productive financing. Increasing the environment-friendly financing can be implemented in both productive and consumptive sectors.
In the field of prudential incentives, will give prudential incentives starting in 2015-2016, among others is the risk-weighted assets (ATMR) by heeding to risk mitigation. And in the field of fiscal incentives, will drive government starting in 2016-2018 to give fiscal incentives such as holiday tax and feed-in tariff.
Sustainable finance in Indonesia is an overall support from financial services industry to achieve a sustainable growth resulted from a harmony in economic, social and environmental interests.
Besides the launching of Roadmap to Sustainable Finance, another event also took place during the occasion, that was the release of the book titled `Pedoman Energi Bersih` (Guidance for Clean Energy), which contains business process, financial analysis and technique, including risk management aspect and a range of regulations related to projects on new and renewable energy. The book is made under cooperation of various parties, namely Environment and Forestry Ministry, OJK, Fiscal Policy Office of Finance Ministry, National Development Planning Agency (Bappenas), Energy and Mineral Resources Ministry, Indonesian Banks Association (Perbanas), Association of Indonesian General Insurance Companies (AAUI), Indonesian Financial Services Association (APPI), Indonesia Stock Exchange (BEI), International Finance Corporation (IFC) and United States Agency for International Development (USAID).
The book launching was expected to be able to give inputs for financial services institutions to increase sustainable financing, particularly in the field of new and renewable energy. Support for new and renewable energy is considered important in correlation with the reasonably high demand on energy in order to drive national development.  Similar guidance books will be released in the next phase for priority sectors in the fields of energy, agriculture, industry, infrastructure and micro, small and medium enterprises (UMKM).
Link:
http://www.ojk.go.id/en/joint-press-release-ojk-and-environment-and-forestry-ministry-launch-roadmap-to-sustainable-finance-and-guidance-book-for-clean-energy
Download pdf version of Roadmap to Sustainable Finance in Indonesia